Tiffany & Co.'s (TIF) shares zigzagged their way through afternoon trading, as analysts and investors raised concerns about the company's valuation and spending plans despite solid results in the second quarter.
The shares rose 0.2% as of 2:46 p.m. on Tuesday, after a brief decline.
"Overall, my take is that TIF posted solid numbers, but its valuation isn't attractive enough to generate sustained momentum unless the retail environment really continues to boom," James DePorre, Real Money regular contributor and CEO of Shark Asset Management, noting the valuation remained unattractive for investment at this time. "Longer-term stockholders might be comfortable with the name, but it won't be very exciting in the short term."
David Butler, a retail investor and Real Money contributor, echoed the sentiment.
"It's still just shy of 28 times forward earnings," Butler noted in his take for Real Money. "That does feel a bit pricey to me and could explain why the stock pared some of its gains today after an early trading spike on the earnings news."
Not everyone is a skeptic.
"The trend-following Moving Average Convergence Divergence (MACD) oscillator was already narrowing so a crossover to the upside and cover shorts buy signal is very likely this week," Real Money on-hose technical analyst Bruce Kamich explained.
As such, he suggested his long-term price target of $212 after a period of "sideways action" on the stock.
If achieved, the price would far exceed the company's 52-week-high band of $141.64 and in the process add about $10 billion to the company's valuation.
While not quite as aggressive as Kamich, Loop Capital Markets LLC Managing Director Laura Champine raised price targets from $150 to $155. Jefferies Financial Group also raised estimates rising $130 to $160.
Champine zeroed in on "top and bottom line momentum" as the company's beat on analyst estimates on sales as positive signals indicating room for the stock to rally. Both analysts issued buy ratings.
While these firms and the market remain somewhat bullish, it looks like Tiffany's has more convincing to do.