Citi says Tiffany’s a winner – share price jumps
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Citi says Tiffany’s a winner – share price jumps

Iconic jeweler Tiffany & Co saw its share price jump last week when Citi Group analysts upgraded its outlook for the luxury retailer, saying Tiffany was “starting to show some shine”. The Group cited a number of factors in the upgrade: management committing to innovation, impact from the tax reform, and even the possibility of a future acquisition. It’s looking like a strong end to a strong year for the company, which has outperformed in 2017.

Tiffany’s share price has risen by 29% so far in 2017

graph 1220 tiffany

SOURCE: Yahoo Finance

Citi analyst Paul Lejuez told CNBC that: "The third quarter brought several positive inflection points, new management is showing us that they understand the challenges and opportunities, and they are not sitting still. Considering the increasing tailwind from FX and the likely earnings per share lift from tax reform (which we don't believe is priced in), we believe Tiffany looks attractive."

Tiffany has been busy this year. Changes in management are resulting in new approaches and more frequent product launches – both intended to “jump-start” sales. Lejuez explained: "Tiffany launched its HardWare collection of jewelry and (more recently) its home/accessories line, as well as opening the Blue Box Café in its NYC flagship. We are optimistic that the changes we have seen thus far have Tiffany on a better path for success."

This isn’t the only reason Citi is positive over Tiffany, though. Thomas Chauvet, Citi’s European luxury goods analyst, believes that the jeweler could be an attractive acquisition target, claiming that there is an “increasing probability” that a “European luxury conglomerate” could be looking at Tiffany – or one of its segments – as a possible purchase. As ever, we’ll be keeping you updated!


Disclosure

Dominion holds Tiffany & Co. in its Global Trends Luxury Fund.


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