Goldman Upgrades Tiffany On Resurgence In Luxury

By Tonya Garcia Markets MarketWatch Pulse

Tiffany & Co. was upgraded to buy from neutral at Goldman Sachs based on the company's exposure to a resurgence in luxury retail. Goldman analysts say the luxury boost is from increases in tourist spending and a "firming" high-end shopper in the U.S., driven by higher consumer net worth and equity market values. "This momentum is evident in a healthy first-quarter acceleration in sales growth reported by luxury peers, which has historically been a good coincident indicator for Tiffany comp sales," the Friday note said. Goldman's Lindsay Drucker Mann also thinks Tiffany could create free-cash flow through operational improvements like better inventory turnover. New leadership, including three new board members and a new chief executive, with previous CEO Mike Kowalski serving in the interim, could be a catalyst for new strategies. Tiffany shares are unchanged in Friday premarket trading, but up 38.7% for the past year. The S&P 500 index is up 16% for the last 12 months.

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