Will TJX Companies Stock Rise Further on Q4 Results?



Analysts’ ratings for TJX Companies

TJX Companies (TJX) currently has a “buy” recommendation from the majority of the analysts following the off-price retailer’s stock. TJX Companies stock was rated a “buy” by 70% of the 27 analysts covering the stock as of February 22. Seven analysts had a “hold” recommendation, while one analyst had a “sell” rating.

On January 7, UBS lowered its price target for TJX Companies stock to $42 from $43. On February 22, J.P. Morgan raised its price target to $54 from $51. As of February 22, TJX Companies stock was up 12.5% on a YTD basis. In comparison, stocks of smaller peers Ross Stores (ROST) and Burlington Stores (BURL) have risen 13.4% and 0.9%, respectively, since the start of the year. The S&P 500 was up 11.4% on a YTD basis as of February 22.

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Key strengths

TJX Companies has an impressive track record of generating same-store sales growth for 22 straight years. The company has proved the strength of its off-price business model in the domestic as well as several international markets. TJX Companies has a strong network of over 20,000 vendors. As of November 3, TJX Companies operated 4,296 stores in the US, Canada, Europe, and Australia. The company sees the opportunity to operate 6,100 stores over the long run.

However, growing competition in the off-price space and the threat from online retailers might impact its future performance. Also, the company’s profitability is under pressure due to higher wages and expenses related to growth initiatives.

As of February 22, the average 12-month price target for TJX Companies was $54.74, which implies an upside potential of about 9%. TJX Companies’ fiscal 2019 fourth-quarter results (we discussed analysts’ expectations in parts 1 and 2) on February 27 will likely result in revisions to its price target by analysts.


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