Whisper Number: How Will Tiffany’s Stock Move After Earnings?

Tiffany’s (NYSE:TIF) is expected to report earnings on Wednesday, May 21. The whisper number is $0.80, two cents ahead of the analysts’ estimate and showing some confidence from investors. Whispers range from a low of $0.75 to a high of $0.84. Tiffany has a 67 percent positive surprise history, having topped the whisper in 28 of the 42 earnings reports for which we have data.

Earnings history:

– Beat whisper: 28 qtrs
– Met whisper: 1 qtrs
– Missed whisper: 13 qtrs

Our primary focus is on post earnings price movement. Knowing how likely a stock’s price will move following an earnings report can help you determine the best action to take (long or short). In other words, we analyze what happens when the company beats or misses the whisper number expectation.

The table below indicates the average post earnings price movement within a one and thirty trading day timeframe:

TIF514A

The strongest price movement of +1.5 percent comes within twenty trading days when the company reports earnings that beat the whisper number, and +2.2 percent within thirty trading days when the company reports earnings that miss the whisper number. The overall average price move is ‘positive’ (beat the whisper number and see strength, miss and see strength) when the company reports earnings.

The table below indicates the most recent earnings reports and short-term price reaction:
TIF514B

The company has reported earnings ahead of the whisper number in two of the past four quarters with a whisper number. In the comparable quarter last year, the company reported earnings sixty-four cents short of the whisper number. Following that report, the stock realized a 3.7 percent loss in five trading days. Last quarter, the company reported earnings nine cents short of the whisper number. Following that report, the stock realized a 6.0 percent loss in twenty trading days. Overall historical data indicates the company to be (on average) a ‘positive’ price reactor when the company reports earnings.

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