NEW YORK (AP) -- A Credit Suisse analyst said Friday that Tiffany & Co. can increase its profit over the next five years by focusing more on its pricier jewelry.
Analyst Christian Buss launched coverage of the upscale jewelry chain with an "Outperform" rating and put a target price of $89 on the shares, which closed Thursday at $78.18.
Tiffany's first-quarter profit rose 3 percent, the company said earlier this week. That topped analysts' expectations and sent shares to their highest level in nearly two years. Revenue rose 10 percent to $895.5 million, helped by promotions tied to the chain's 175th anniversary and "The Great Gatsby" movie.
Credit Suisse's Buss said Tiffany could increase revenue by a high-single-digit rate and earnings by a low-teens rate over the next five years.
The analyst said Tiffany has relied too heavily on its cheaper jewelry offerings, which are profitable but dilute the exclusivity of the Tiffany brand. The analyst believes that the strongest profit growth in the next few years will come from its engagement and wedding rings, as well as its high-end "statement" jewelry.
Shifting more sales to Asia will help boost profitability, Buss said. He also predicts lower raw materials costs.
Tiffany spokesman Mark Aaron said the company had no comment on the analyst's note.
Shares rose 42 cents to $78.60 in afternoon trading Friday.