NEW YORK (
) -- In our daily round up of investment ideas, Tiffany has more bling and Blackberry maker Research in Motion can't shake off old problems. Analysts weigh in on what's happening in the software and biotech sectors, and tell investors how to think about the restaurant sector.
1) Tiffany Can Shine Again
Tiffany & Co.
(TIF - Get Report)
may yet be able to shrug off a bad holiday season. "The Tiffany story is by no means broken," write analysts at Oppenheimer, who believe that transitory factors were mainly to blame for weaker sales growth. While the firm cut its price target on the stock to $75 from $93 a share, it says there's a 20% upside from the current price. Shares were last trading around $63 a piece.
Why did Tiffany suffer so much this holiday season? The store got hit by weak sales in Europe and the northeastern U.S., including at its Manhattan flagship store. Amid a weak economy, consumers likely got distracted by sales and discounts elsewhere. Tiffany, not surprisingly, doesn't believe in cutting prices.
Oppenheimer, however, is optimistic that the high-end retailer can capture market share in the jewelry sector as the global economy improves. In particular, the company might be able to leverage growing consumer economies. Last week, Tiffany announced that it would partner with Damas Jewellery in an attempt to enhance its brand in the United Arab Emirates.
Adding to Oppenheimer's thesis that Tiffany will shrug off the holiday season, sales at the company tend to rebound quickly. "In the first quarter of 2009 (period ended April 2009), Americas comps at TIF declined 32%. Americas comps rebounded to +10% by the fourth quarter of 2009 (period ended January 2010)," writes the firm.
Furthermore, lower commodity prices might ease the pressure on Tiffany's margins: "Since peaking in April 2011 silver prices have declined more than 30% to about $30 an ounce from nearly $50 an ounce."
Investors will have to wait to see what happens. Tiffany will report earnings and reveal its outlook for fiscal 2012 on March 20.