Why Tiffany & Co (TIF) Stock Is Spiking In Pre-Market Trading Today

NEW YORK (TheStreet) -- Tiffany & Co (TIF) shares are rocketing up 8.9% to $96.05 in pre-market trading on Thursday after having its price target raised to $115 by analysts at Topeka.

The increase follows the release international jewelry company's first quarter earnings results in which it beat analysts earnings estimates by 19 cents for the quarter, earning 97 cents per diluted share. Sales were also up 13% over the same quarter the previous year. 

Tiffany experienced a similar rise in trading yesterday, gaining nine points in trading after releasing its earnings report before the opening bell.

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TheStreet Ratings team rates TIFFANY & CO as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate TIFFANY & CO (TIF) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • TIF's revenue growth has slightly outpaced the industry average of 4.6%. Since the same quarter one year prior, revenues slightly increased by 5.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for TIFFANY & CO is rather high; currently it is at 64.26%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -7.97% is in-line with the industry average.
  • The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.80 is somewhat weak and could be cause for future problems.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Specialty Retail industry and the overall market, TIFFANY & CO's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Net operating cash flow has significantly decreased to -$50.48 million or 116.43% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: TIF Ratings Report
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