The growing demand for jewelry in China, combined with low overstocking of the diamond market, will have a positive impact on the development of Tiffany & Co., especially in view of the growing number of weddings in China, say Sterne Agee analysts Ike Boruchow and Tom Nikic ), according to Rapaport.
Sterne Agee recommends "buying" shares of Tiffany & Co., setting a price forecast for the year at $ 105 per share. Earnings per share in 2014 and 2015 fiscal years are expected at $ 4.10 - $ 4.60.
By the end of the trading day on April 18, the stock price of Tiffany & Co. on the New York Stock Exchange fell by 29 cents to $ 86.65 per share.
"We continue to assert that Tiffany has the most positive prospects in this market, taking into account the diversity of opportunities for business growth - growth in Asian markets, changes in domestic demand, the possibility of increasing gross margin - and we would recommend buying their shares, which have now fallen by 10% relative to the highest level, "the report said.
According to Sterne Agee, the success of Tiffany & Co. will be ensured not only due to macroeconomic trends in China (for example, an increase in the number of wealthy citizens), but also thanks to the company's strategy for active development in the segment of wedding jewelry.
Ten years ago, Tiffany & Co. there was one store in Continental China and 11 - in Greater China, and now the company owns 26 stores in Continental China and 45 - in Greater China. With this in mind, Sterne Agee believes that Tiffany's revenues in China grew from $ 100 million in 2008 to almost $ 500 million in 2013.