Tiffany & Co. TIF 0.16% shares could get a big boost from improving margins in coming quarters. Jefferies analyst Randal Konik is so positive about the opportunity for Tiffany that he has raised the firm’s price target for the Buy-rated stock from $85 to $100.
“We remain confident in the story and ongoing fashion jewelry improvement given margin/EPS upside,” Konik explains.
Looking ahead, he sees five major tailwinds for Tiffany:
- 1. Improvement in the fashion jewelry market
- 2. Abating tourism headwinds
- 3. Low input costs flow-through
- 4. Expanding brand loyalty
- 5. Multiple expansion in-line with peers
Konik believes silver will drive Tiffany’s margins as high as 63 percent by fiscal 2019.
According to earnings calls from retailers such as Coach Inc COH 0.87%, Macy’s Inc M 2.94% and Ralph Lauren Corp RL 2.81%, tourism inflows have improves slightly since Q2. Konik points out that tourism has historically demonstrated a positive correlation with Tiffany same-store sales.
From a valuation standpoint, Tiffany’s current share price includes…
Click here to continue reading
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!
