Tiffany & Co. (
) is lower ahead of their third quarter earnings report, expected
out before the market opens tomorrow, November 24. The stock is
down 3% in afternoon trading today.
The jeweler is expected to report an EPS of $0.37 on revs of
$653.32 million. For the second quarter, 2010, Tiffany's reported
an adjusted EPS of $0.55 on revs of $0.55 on revs of $668.8
million, compared to the consensus EPS of $0.53 and revs of $690.24
million. For the third quarter in 2009, the iconic brand posted an
adjusted EPS of $0.33 on revs of $598.2, stronger than the
consensus EPS of $0.24 and revenues of $573.75 million.
Shares gained 22.4% through Q310, to $53.00 at the end of October.
The stock is up 8.7% since the end of the quarter, and 33% on the
year so far.
Tiffany is going for a forward P/E of 21.8x FY10 EPS estimates, and
19.3x FY11 EPS estimates.
Data from Bloomberg has 14 analysts with a Buy rating on HPQ, 6
with a Hold, and one suggesting to Sell. The analyst price target
average is $58, with a high of $65 and a low of $42.
Tiffany recently declared a $0.25 quarterly dividend, which is
yielding 1.7% on an annualized basis.
Probably one of the biggest analyst changes came in September, when
Goldman Sachs downgraded the common shares from Neutral to Sell.
Goldman noted unfavorable risk/reward as they see slowing EPS beats
and peak valuations.
Goldman is also looking for an quarterly earnings beat, seeing an
EPS of $0.36. A victory would likely be attributed to "(1) strong
high-end spending like other luxury retailers with international
exposure and (2) strengthening [foreign exchange] rates should
boost EPS and tourist spend." They note that stocks with demanding
set-ups have traded lower, amid strong earnings beats. They have
maintained their Sell rating, noting increasing FY11 margin
pressure (increased diamond prices, with gold and silver increase
20% to 30% each), and a peak valuation (with the stock trading at
3x premium valuation compared to history and 3.5x relative to
peers). Margin pressures hampering EPS growth give them little
reason to expect a multiple expansion.
Deutsche Bank is looking for revs of $664 million, slightly
decelerating sequentially led by tougher comps. Americas should be
stable at 4% organic growth Y/Y, and a strong Other Asia segment,
with 12% organic growth there. Japan is expected to be lukewarm,
and Europe will also be soft. Net margin of 14% (up 290 basis
points from Q309) on a gross margin of 57.5% (which will be up 270
basis points Y/Y). Deutsche has a Buy rating on the shares with a
price target of $58.00.
Signet Jewlers (
) reported a solid third quarter, with EPS beating by ten cents,
and revs of $641.8 million soaring past the consensus of $618.51
million. Gross margin also improved from 26.7% to 30.2% in the
) also reported their first quarter earnings today, with with a
narrower than expected loss of $1.30 (operating) and revs of $327
million. Gross margin also improved here, from 48.6% to 50.5%.
Comps were up 7.25 for Signet, and down 1.1% at Zale.
Tiffany & Co. is expected to release their Q310 earnings on
Wednesday, November 24, 2010, at approximately 7:00am EST. Stay
tuned to StreetInsider.com's EPS Central section to see our
analysis of the highly-anticipated quarterly results within seconds
of their release.