Tiffany & Co. TIF is scheduled to release first-quarter fiscal 2015 results on May 27. The big question facing investors is whether this jewelry retailer will be able to deliver a positive earnings surprise in the quarter to be reported. Here’s a discussion on the determinants of the first-quarter results:
Earnings Surprise History
Tiffany’s past performance reveals that it has outperformed the Zacks Consensus Estimate in the trailing four quarters by an average of 9.2%. In the final quarter of fiscal 2014, the company registered a positive earnings surprise of 0.7%. Analysts believe that the momentum building around the stock is guiding toward another impressive performance.
Growth Score Confirms Upside Potential
The attractiveness of Tiffany as an investment option is also confirmed by its Growth Style Score of ‘A’. The Growth Style Score combines conventional growth metrics with a thorough analysis of the company’s income statement, balance sheet and statements of cash flows to evaluate its financial health and the sustainability of its growth trajectory. Back-tested results show that stocks with a Growth Style Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside potential.
Zacks Model Speaks of Likely Earnings Beat
Our proven model shows that Tiffany is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. The Most Accurate estimate stands at 74 cents and the Zacks Consensus Estimate is pegged at 69 cents. So the ensuing +7.25% ESP and the company’s Zacks Rank #3 (Hold) make us reasonably confident of a positive earnings beat.
A Look at Fundamentals
Tiffany holds a significant position in the global jewelry market due to its distinctive brand appeal. We believe that the company’s omni-channel platform, store expansion programs and enhancement of market share will act as catalysts, and help improve its top- and bottom-line performances in the quarter to be reported.
Stocks that Warrant a Look
Here are some other companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Casey's General Stores, Inc. CASY has an Earnings ESP of +14.29% and a Zacks Rank #1 (Strong Buy).
G-III Apparel Group, Ltd. GIII has an Earnings ESP of +33.33% and a Zacks Rank #3.
Burlington Stores, Inc. BURL has an Earnings ESP of +5.00% and a Zacks Rank #3.
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