Cowen Resumes Coverage on Tiffany & Co. (TIF) with an Underperform

November 21, 2008 9:12 AM EST

Cowen & Co resumes coverage on Tiffany & Co. (NYSE: TIF) with an Underperform rating.

Cowen analyst says, "We believe the substantial deterioration in global growth prospects puts TIF's luxury-driven business model at significant risk. Weak consumer spending trends combined with declining tourism poses substantial risks to TIF's domestic results. We also expect macroeconomic headwinds to pressure results in Japan , emerging markets and Europe , where we expect the company to see fading currency benefits into FY09. We believe consensus expectations for FY08 and FY09 are too high and that management will be forced to dramatically revise FY08 guidance and issue FY09 guidance well below Street expectations... We believe the shares should trade at a significant discount to the company's historical average, as we forecast that its growth and returns profile will decline dramatically. Aside from relative value, our DCF model indicates substantial downside potential relative to the market over the next twelve months."

Tiffany & Co. is a holding company that operates through its subsidiary companies.

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