Analyst Starts Tiffany With 'Buy' Rating

NEW YORK (AP) — An analyst forecast strong sales at established stores for Tiffany & Co. and started coverage of the luxury jeweler with a "Buy" rating on Tuesday.

Shares rose $1.86, or 4.8 percent, to $40.36 in afternoon trading.

Citi Investment Research analyst Kimberly Greenberger expects Tiffany to post revenue growth in the fourth quarter after gaining market share. Many smaller jewelers were forced to close their doors during the recession as consumer demand remained weak.

Specifically, Greenberger said that at least 5 percent of the $60 billion U.S. jewelry market is "up for grabs" in 2010.

"In our view, Tiffany can grab at least 2 percent of this $3 billion slice over time, given its strong brand recognition and trust," Greenberger wrote in a client note.

Also, Tiffany will benefit in the fourth quarter from lower prices for diamonds, platinum and silver.

There are also opportunities to expand domestically and overseas, as well, she added.

Tiffany is scheduled to release third-quarter results before the market opens on Nov. 25.