Tiffany & Co. (NYSE: TIF) is
engaged in the design, manufacture, and retailing of fine jewelry, timepieces, sterling silverware, china, crystal, stationery, fragrances and personal accessories. The firm sells its goods exclusively through some 150 stores worldwide, a Web site and catalogs.
The company pleased investors last week, when it reported Q2 EPS of 63 cents and revenues of $732.4 million. Analysts had been expecting 55 cents and $720.6 million. Management also guided FY09 EPS to $2.82-$2.92 ($2.83 consensus). The CEO noted, "Our continued expansion throughout Asia and Europe should contribute to increasingly consistent and resilient long-term earnings growth." Lehman Brothers subsequently reiterated its "overweight" rating on the issue.
TIF shares
popped into a bullish "flag" consolidation pattern on the news. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Altogether, brokers now recommend the stock with one "strong buy", three "buys", seven "holds" and two "sells". Analysts see a 12% growth rate, through the next year. The TIF P/E ratio (15.59), PEG ratio (1.29), Price to Sales ratio (1.67), Price to Book ratio (2.89), Price to Cash Flow ratio (10.76), EPS Growth rate (40.00%), Operating Margin (18.34%), Net Profit Margin (11.50%), Return on Assets (11.60%) and Return on Investment (13.81%) compare favorably with industry, sector and S&P 500 averages. Over 95% of the outstanding shares are held by institutional investors. The stock is one of those used to calculate the S&P 500 Index. Over the past fifty-two weeks, it has traded between $32.84 and $57.34. A stop-loss of $39.00 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold a position in the stock discussed above.
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