Ask Matt: Is the shine off Tiffany?

Q: Is the shine off Tiffany?

Tiffany & Co. retail store in an upscale shopping area in Vienna, Va.

A: Luxury jewelry Tiffany (TIF) has lost its luster with investors. But investors still are hoping the company can get its shine back.

Shares of the high-end retailer known for its blue boxes fell more than 3% Tuesday to roughly $64 a share, the stock’s lowest level in 52 weeks. The stock move follows disappointing holiday results: Worldwide sales fell 6% from the same year ago period, the company said. Tiffany blamed the strong U.S. Dollar for hurting sales – which is a common recent complaint among many luxury retailers. The weak dollar makes goods in the U.S. More expensive for tourists from other countries. The weak top line prompted the company to cut its earnings forecast to $3.78 a share for 2015, which would be a 10% decline from year ago levels. Analysts continue to think Tiffany will bounce back. Analysts are holding out an 18-month price target on Tiffany of $89.92, says S&P Capital IQ. If correct, that would be more than 40% upside from Tuesday’s stock price. Analysts see the company’s profits falling roughly 9% in fiscal 2016 ended in January – but bouncing back 8% in fiscal 2017. Trading at 16.5 times trailing earnings, Tiffany is a discount to the 27 P-E it sported six months ago. The global economy is key to Tiffany and 2017.

Explore more:  Jacob Livesay | USA TODAY

USA TODAY markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at [email protected] or on Twitter @mattkrantz.

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