We recently upgraded our recommendation on
Tiffany & Co.
) to Outperform with a price target of $100, following the
jewelry maker's outstanding third-quarter fiscal 2013
performance. The company's better-than-expected results came on
the back of higher demand in the Asia-Pacific region. The company
currently holds a Zacks Rank #2 (Buy).
Why the Upgrade?
We believe Tiffany is well poised to support sales and
earnings growth in the long run by leveraging capital investments
made over the past several years in distribution, manufacturing
and diamond sourcing processes. The company's long-term growth
prospects remain encouraging given its new product launches and
focus on enhancing its geographic reach through store expansion
program. It remains committed to achieve long-term objectives of
at least 15% earnings growth and a 10% to 12% sales increase.
With four successive quarters of better-than-expected
bottom-line results, it seems Tiffany has positioned itself
favorably. The company's fiscal 2013 earnings guidance is also
encouraging. With the economy showing signs of recovery, we
expect Tiffany's robust performance to continue going
Tiffany, which competes with
Signet Jewelers Limited
), continued its positive earnings streak by beating the Zacks
Consensus Estimate in the trailing four quarters. The company
posted a positive earnings surprise of 25.9% in the third
quarter, 12.2% in the second quarter, 32.1% in the first quarter
of fiscal 2013, and 2.2% in the fourth quarter of fiscal
The company's global net sales grew 7% in the third quarter,
following a 4% rise in the second quarter and 9% in the first
quarter of fiscal 2013. Also, sales grew 4% in the fourth quarter
of fiscal 2012.
Tiffany now expects total net sales growth in the mid-single
digits for fiscal 2013. In constant currencies, total net sales
are projected to increase in the high single digits.
Other Stocks Worth Considering
Other better ranked retail stocks that look promising and are
expected to continue with their upbeat performance include
Barnes & Noble, Inc.
Michael Kors Holdings Limited
), both sporting a Zacks Rank #2 (Buy).
BARNES & NOBLE (BKS): Free Stock Analysis
MICHAEL KORS (KORS): Free Stock Analysis
SIGNET JEWELERS (SIG): Free Stock Analysis
TIFFANY & CO (TIF): Free Stock Analysis
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