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What Are Analysts Saying About Tiffany & Co.'s (NYSE:TIF) Growth?

Simply Wall St

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The latest earnings release Tiffany & Co.'s (NYSE:TIF) announced in January 2019 suggested that the company experienced a large tailwind, leading to a high double-digit earnings growth of 58%. Investors may find it useful to understand how market analysts predict Tiffany's earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

Check out our latest analysis for Tiffany

Analysts' outlook for this coming year seems rather subdued, with earnings climbing by a single digit 2.6%. The growth outlook in the following year seems much more optimistic with rates generating double digit 10% compared to today’s earnings, and finally hitting US$699m by 2022.

NYSE:TIF Past and Future Earnings, April 1st 2019

Even though it’s useful to be aware of the growth each year relative to today’s figure, it may be more valuable to determine the rate at which the business is rising or falling on average every year. The pro of this method is that it ignores near term flucuations and accounts for the overarching direction of Tiffany's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I've inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 6.6%. This means that, we can assume Tiffany will grow its earnings by 6.6% every year for the next couple of years.

Next Steps:

For Tiffany, I've put together three important aspects you should further examine:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is TIF worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether TIF is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of TIF? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.