Shares of Tiffany & Co. jumped 4 percent Thursday after Citigroup upgraded the luxury retailer to buy, saying the jeweler is "starting to show some shine."

"The third quarter brought several positive inflection points, new management is showing us that they understand the challenges and opportunities, and they are not sitting still," Citi analyst Paul Lejuez explained. "Considering the increasing tailwind from FX and the likely earnings per share lift from tax reform (which we don't believe is priced in), we believe Tiffany looks attractive."

It has been a busy year at Tiffany with "significant" changes to both the board and management. Though the company typically debuted major collections every few years, it added both CEO Alessandro Bogliolo and head designer Reed Krakoff this year in an effort to jump-start sales with new blood and more frequent product launches.

"Tiffany launched its HardWare collection of jewelry and (more recently) its home/accessories line, as well as opening the Blue Box Café in its NYC flagship," explained Lejuez. "We are optimistic that the changes we have seen thus far have Tiffany on a better path for success."

The new HardWare collection features pieces like a $12,000 link bracelet in 18-karat rose gold.

Shares of Tiffany are up 28 percent this year versus the S&P 500's 19 percent climb, with 9 percentage points of the stock's surge coming in the last three months. Tiffany stock closed up 3.4 percent higher Thursday after the call.

The analyst raised his price target on Tiffany to $115 from $92. The new target is 20 percent higher than Wednesday's closing price.

Meanwhile, Citi has more reason to favor the luxury retailer. Citi's European luxury goods analyst Thomas Chauvet said he believes the company could be an attractive acquisition target. Chauvet and his team find "increasing probability" that a European luxury conglomerate could make a move to buy Tiffany or one of its segments, potentially boosting the shares further.

Tiffany & Co. did not immediately respond to CNBC's request for comment.