Q4 Preview: Analysts Exercise Some Caution on Tiffany & Co. (TIF) into Results

Tiffany & Co. (NYSE: TIF) shares are trading higher Monday heading into the company's fourth-quarter earnings report, expected out before the market opens Tuesday.

The Street is looking for EPS of $1.42 on revs of $1.18 billion. This compares to EPS of $1.41 and revs of $1.1 billion reported in the same period last year.

Tiffany stock dropped about 20 percent to $63.53 at the end of the latest quarter. Shares are up about 7.7 percent since and up just 3.7 percent for the year. Tiffany shares have been in a range of $56.21 to $84.48 over the last 52-week time frame.

Analysts may see a diamond in the rough here: recent Bloomberg data shows 10 with a Buy rating, 13 at Hold, and none with a Sell. The Street price target average is $73, ranging from $60 to $88.

Analyst Comments

• Goldman Sachs sees EPS of $1.42 in the quarter with global comps up 4 percent, reflecting Tiffany's disappointing Holiday sales numbers. Goldman said Tiffany was an outlier for the period, with most peers reporting an increase in sales. Looking ahead, Goldman said it sees "a bifurcated year where 1H sees on-going sales and margin challenges and 2H presents an opportunity to resume double-digit EPS growth given easing comparisons."
  
  For 2012, Goldman sees management taking a more cautious approach with EPS growth flat to up 10 percent, or a range of $3.65 to $4.00.
  
  
• Deutsche Bank sees sales of $1.22 billion and EPS of $1.54. Deutsche said, "TIF relative underperformance was due to contingent factors such as a tough environment characterized by discounting in the US coupled with restrained spending by consumers for fine jewellery especially at accessible price points.
  
  We expect these trends have slightly improved in January thanks in part to the Chinese New Year Jan shift, leading Q4 sales to E1218 million (+6-7% at cFX and space), EBIT to E318m, with margin at 26.1%, i.e. expanding by 90bps, slowing from the excellent +350bps posted in Q3, and net profit at E198m (reported EPS at $1.53)."

Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. You can also check out Tiffany's past performance at Streetinsider's Tiffany's Income Statement.

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