Tiffany & Co. Stock Hold Recommendation Reiterated (TIF)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Tiffany (NYSE: TIF) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+ . The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • TIF's revenue growth trails the industry average of 11.6%. Since the same quarter one year prior, revenues slightly increased by 1.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • TIFFANY & CO's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, TIFFANY & CO increased its bottom line by earning $3.41 versus $2.87 in the prior year. This year, the market expects an improvement in earnings ($3.60 versus $3.41).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Specialty Retail industry and the overall market on the basis of return on equity, TIFFANY & CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • TIF has underperformed the S&P 500 Index, declining 11.53% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • Net operating cash flow has decreased to $62.50 million or 29.08% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, TIFFANY & CO has marginally lower results.

Tiffany & Co., through its subsidiaries, engages in the design, manufacture, and retail of fine jewelry worldwide. The company has a P/E ratio of 18.1, equal to the average specialty retail industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Tiffany has a market cap of $7.88 billion and is part of the services sector and specialty retail industry. Shares are down 6% year to date as of the close of trading on Wednesday.

You can view the full Tiffany Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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