Luxury jewelry store chain Tiffany & Co. (TIF) is trading lower today as Wall Street awaits its fourth quarter earnings report on Monday, but by most accounts analysts are expecting to see strong earnings from the company.Going into Monday's earnings report, analysts are forecasting the company to report $1.13 a share. For the same period last year Tiffany had earnings of $0.85 per share, so if it is able to match analyst estimates it would mark a very respectable 32% jump year over year.
The recession was hard on companies such as Tiffany as consumers cut back on discretionary spending, especially for luxury items, but analysts believe that Tiffany will post strong numbers after it preannounced strong holiday sales numbers. Not only should TIiffany post upbeat earnings, but analysts are expecting to see the company lift its first quarter guidance as well.
Dorothy Lakner, an analyst with Caris & Co. told investors that she expects to hear "good news" on Monday, and maintains a Buy rating on the stock. Lakner currently has a $57 price target on the stock.
Tiffany & Co. is currently trading at $47.11, down $0.47 on the day. The stock hit a new 52 week high yesterday of $48.38.
Guy Adami from CNBC's Fast Money is also bullish on the stock. He stated on the show that he is a buyer of Tiffany, and that people are going to be surprised by Monday's earnings report, and that he expects to shares shoot higher following the report. While he is bullish, he is not quite as bullish as Lakner, stating that if the stock moves through the $50 mark, it would be time to consider getting out.
Not everyone is so convinced though. Goldman Sachs (GS) option strategists are telling their clients to bet against the stock. It is not that they believe that company is going to miss earnings, but that there is just very limited upside to its shares, citing preannounced holiday sales data and the general consensus that the company will lift guidance.
With the above factors already being priced into the company's stock, it is easy to understand why Goldman sees limited upside. Like the old saying goes... buy on the rumors and sell on the news, this could be exactly what we see on Monday.
What could prove Goldman wrong though is just how strong the numbers do come out. If the company is able to crush estimates, and give a really strong upward guidance for its first quarter you can be sure the stock will advance, it's just a matter of how much.
The company will be reporting its numbers before the market opens on Monday, so we will get a better idea of just how shiny Wall Street thinks the stock is. We will post the results once they are made available.
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