Tiffany (TIF) got a lift Monday and crossed $80 a share after an analyst assigned the diamonds and jewelry seller the highest price target on Wall Street, one that's 13.9% above the consensus.
In recent trading, New York-based Tiffany was up 4% at $80.09. The move upward followed word that Stifel Nicolaus gave the stock a buy rating with a $92 price target, in part because the firm believes Americans are feeling better about their monetary situations. (Recent consumer confidence and consumer sentiment measures have been more upbeat.) Thus far, Tiffany's session top is $80.10. Its 52-week best is $81.25.
With the average target among the analysts who follow the stock at $80.75, according to FactSet, the call is unquestionably an optimistic one. Two other analysts have $90 targets on Tiffany, but the Stifel price expectation is the loftiest call out there. It's also more than $8 ahead of Tiffany's all-time closing peak at $83.32, set on July 19, 2011.
For Tiffany to get to Stifel's target, it's going to have to do so on top of what's been an enviable run. Coming into the trading week, the stock had risen 30.7% from the end of 2012 through the finish of trading Friday, roughly double the S&P 500's 14.9% increase. Additionally, in that time it's outpaced retail overall, which has a 28.6% year-to-date advance, measured by the SPDR S&P Retail (XRT) exchange-traded fund.
Also notable is the fact that against global luxury brands LVMH Moet Hennessy Louis Vuitton (LVMUY) and Richemont (CFRHF), the company behind Cartier and Van Cleef & Arpels, Tiffany trades at a richer multiple, carrying a 20.7 forward price-to-earnings ratio, vs. their 16.8 and 17.5, respectively. At the current level, it surpasses Tiffany's average of right under 17 for the last five years. In terms of other valuation metrics, Tiffany is already trading ahead of its five-year average price/earnings-to-growth and price-to-book ratios.
For the fiscal year ending in early 2014, analysts are looking for revenue of $4.05 billion and earnings of $3.52 a share at Tiffany. Sales of that level would equate to a 6.7% increase from the prior year.
You tell us: Has Tiffany already risen enough, making this call overly optimistic? Or is the stock going to continue on its path higher?