Tiffany, An Earnings & Spending Preview for the 1%-ers (TIF, NILE, ZLC)

Retail

Published: November 28, 2011 2:49 pm

Last Updated: November 28, 2011 4:04 pm

Tiffany & Co. (NYSE: TIF) is expected to report earnings Tuesday. If there is one barometer on what the 1% are willing to spend money on, Tiffany may be it in the sector of luxury retailers. The consensus estimate is for EPS of $0.61 on revenue of $802.1 million, compared with EPS of $0.46 on revenue of $681.7 million in the same period a year ago.

Currently, there is are no extreme price alerts to consider. At $74.00 (after a 6.5% gain on Monday), the 52-week trading range is $54.58 to $84.49 and a rounded price target consensus from Thomson Reuters is $83.00. During the extreme selling in September shares broke under $60.00.

As far as the charts are concerned, there appears to be the case for support if today’s prices hold up. The chart from stockcharts.com shows that $72.49 is the 50-day moving average and $69.62 is the 200-day moving average. This is very different from online rival Blue Nile Inc. (NASDAQ: NILE), where the $34.28 price compares to a 52-week range of $30.32 to $64.45 and a consensus Thomson Reuters price target of $36.00 (shares were closer to $48 before its earnings, ouch!).

Zale Corporation (NYSE: ZLC) also is surging ahead of Tiffany earnings as it is considered more leveraged financially and to the public. Zale is up 10% on Monday at $3.42 and the 52-week range is $2.06 to $6.90.

We would note that Goldman Sachs has just maintained its “Neutral” rating on Tiffany and its $72.00 price target. With the decline we have seen in diamond prices, this may help to offset the higher gold prices from a year earlier.

As far as history, Tiffany beat second quarter estimates to $3.65 to $3.75 EPS and that allowed it to raise guidance. We’ll see if “bashing the wealthy” has had any real impact or not.

JON C. OGG

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