UPDATE: Goldman Sachs Upgrades Tiffany & Co. on EPS and FCF Acceleration

In a report published Thursday, Goldman Sachs analyst Lindsay Drucker Mann upgraded the rating on Tiffany & Co. (NYSE: TIF) from Neutral to Conviction List-Buy, and raised the price target from $97.00 to $105.00.

In the report, Goldman Sachs noted, “We upgrade TIF to CL-Buy from Neutral, with a +19% expected return over a 6-month horizon and high visibility near-term catalysts. TIF is a top idea into year-end and early 2014 based on near-term upside to both gross margin and free-cash expectations, as well as sustained quality sales momentum. TIF's underlying EPS and cash generation power have been masked in recent years by headwinds that are now reversing. These include cost inflation, delayed price actions, and cash investments in fixed assets and inventory. We are +12% above the consensus in 4Q13 and +10% above for FY13 as the full potential of TIF's P&L shows through.”

Tiffany & Co. closed on Wednesday at $88.58.