Tiffany & Company (TIF) is well positioned to deliver robust sales and earnings growth by leveraging capital investments made in the past several years. The company holds a significant position in the world jewelry market and is poised to benefit from its enhanced geographic reach. With signs of improved demand for luxury items worldwide, Tiffany plans to accelerate its store expansion program.
Moreover, with a healthy balance sheet, Tiffany remains committed to achieve long-term objectives of at least a 15% return on equity and a 10% return on assets. The company, in the wake of better-than-
expected second-quarter 2011 results, now anticipates a high-teens percentage rise in total net sales and an increase of 25% to 28% in earnings per share for fiscal 2011.
We have a long-term Outperform recommendation on the stock. Our target price of $73.00, 19.4X 2011 EPS, reflects this view.
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