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Tiffany (TIF) is nearing its 52 week low as the company gets ready to report earnings this week. Much of the drop is due to the fact that many believe the economy is softening which should translate into weaker earnings for high-end retailers.

However, Coach (COH) and Blue Nile (NILE) are examples of high-end companies who have recently reported positive earnings. Luxury retailers seem to be able to survive slowdowns better than the Wal-Marts of the world due to their higher income level customer base. $3-plus gas is not going to deter the spending of the average Tiffany shopper, yet the stock is priced as such.

Looking at the fundamentals we find an average 10 year p/e of 22.64 vs. a current p/e of 17.30. From a p/e standpoint you would figure the worst is yet to come, which may signal great upside for those willing to wait.

Using low-end current year estimates of 1.74 per share times a p/e of 22 equals a 12 month price target of $38.28. Tiffany does have some risks, but if the market is willing to offer a margin of safety into the $20's I'm a buyer of this great American brand.

TIF 1-yr chart:

Source: Tiffany Looks Cheap Going Into Earnings