After hitting a 52-week high of $72.48 on Apr 2, the shares of Tiffany & Company (TIF) gathered momentum yet again to craft a new high of $74.20 yesterday. This designer, manufacturer and retailer of fine jewelry eventually closed at $73.38, up 1.5% from the previous day’s session and generated a year-to-date return of roughly 25%.
Tiffany currently trades at a forward P/E of 21.15x, a 6.8% premium to the peer group average of 19.80x. The company’s long-term estimated EPS growth rate is 12.3%, which is modestly healthy. Average volume of shares traded over the last 3 months stands at approximately 2,004K.
Barring a few occasional pull backs, shares of this Zacks Rank #3 (Hold) have been trending upwards since Mar 22, when the company posted better-than-expected fourth-quarter fiscal 2012 results due to a surge in demand in the Asia-Pacific region.
The quarterly earnings of $1.40 per share beat the Zacks Consensus Estimate of $1.37, and rose marginally by 0.7% from $1.39 earned in the prior-year quarter. The positive earnings surprise of 2.2% followed four straight quarters of negative earnings surprises. Again, with respect to its top line, Tiffany registered growth of 4% to $1,235.8 million.
Tiffany holds a significant position in the world jewelry market due to its distinctive brand appeal. We believe that the company is well positioned to support robust sales and earnings growth in the long run by leveraging capital investments made over the past several years in distribution, manufacturing and diamond sourcing processes. Moreover, with nearly half of the total sales generated internationally, we believe that the company is sufficiently diversified from a regional perspective as well.
Tiffany now projects fiscal 2013 earnings in the range of $3.43 – $3.53 per share, reflecting year-over-year growth of 6% to 9%. On the other hand, total net sales are forecasted to increase between 6% – 8% for the fiscal year.
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