Stocks are down post-results
Both TJX Companies (TJX) and Ross Stores (ROST) exceeded earnings expectations in their fiscal third quarters. For TJX Companies, the third quarter of fiscal 2019 ended on November 3. For Ross Stores, the third quarter of fiscal 2018 ended on November 3.
However, concerns about the impact of higher costs on the profitabilities of these companies dragged their stocks down. TJX Companies and Ross Stores fell 4.4% and 9.4%, respectively, on November 20, the day they announced their results. The stocks fell 1.4% and 1.2%, respectively, on November 21.
On November 21, TJX Companies, Ross Stores, and Burlington Stores (BURL) had risen 20.7%, 1.7%, and 20.7%, respectively, year-to-date.
Several analysts lowered their price targets on TJX Companies and Ross Stores following the companies’ third-quarter results. The stocks’ price targets were lowered by the following companies and amounts:
- TJX Companies: UBS ($43 from $45), Nomura ($55 from $60), Cowen and Company ($59 from $62), Credit Suisse ($50 from $54), Telsey Advisory Group ($51 from $55), Morgan Stanley ($56 from $59.50), and Barclays ($55 from $59)
- Ross Stores: UBS ($89 from $96), Nomura ($95 from $101), D.A. Davidson ($84 from $96), Cowen and Company ($110 from $112), Credit Suisse ($95 from $100), Jefferies ($86 from $90), RBC ($88 from $92), and Barclays ($99 from $106)
As of November 22, 18 out of 28 analysts have rated TJX Companies stock as a “buy.” Nine have rated it as a “hold,” and one has rated it as a “sell.” The average 12-month price target for TJX Companies stock is $54.48. This price estimate reflects a potential upside of 18%.
Ross Stores has a “buy” recommendation from 15 out of the 26 analysts covering its stock and a “hold” rating from 11. No analysts currently have “sell” recommendations on Ross Stores. On average, the 12-month price target for Ross Stores stock is $94.78, which implies a potential upside of 16%.
Let’s compare the sales performances of these off-price retailers in the next article.