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As Tiffany & Co. (NYSE:TIF) released its earnings announcement on 30 April 2019, it seems that analyst expectations are fairly bearish, with earnings expected to grow by 7.2% in the upcoming year against the higher past 5-year average growth rate of 9.3%. With trailing-twelve-month net income at current levels of US$586m, we should see this rise to US$628m in 2020. Below is a brief commentary on the longer term outlook the market has for Tiffany. For those interested in more of an analysis of the company, you can research its fundamentals here.
What can we expect from Tiffany in the longer term?
Longer term expectations from the 25 analysts covering TIF’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of US$586m and the final forecast of US$769m by 2022, the annual rate of growth for TIF’s earnings is 10%. This leads to an EPS of $6.32 in the final year of projections relative to the current EPS of $4.77. Margins are currently sitting at 13%, which is expected to expand to 15% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Tiffany, I've put together three key aspects you should further research:
- 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.
- Valuation: What is Tiffany 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 Tiffany is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Tiffany? 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 email@example.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.