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Framingham, Massachusetts-based The TJX Companies, Inc. (TJX) is an off-price retailer of apparel and home fashions. Valued at a market cap of $144.4 billion, the company offers a wide range of products, including family apparel, footwear, and accessories, as well as home décor items such as furniture, rugs, lighting, cookware, decorative accessories, pet supplies, and gourmet food.
This retail giant has underperformed the broader market over the past 52 weeks. Shares of TJX have gained 14.2% over this time frame, while the broader S&P 500 Index ($SPX) has soared 18.4%. Moreover, on a YTD basis, the stock is up 7%, compared to SPX’s 7.6% uptick.
However, zooming in further, TJX has outpaced the SPDR S&P Retail ETF’s (XRT) 7.3% return over the past 52 weeks and a marginal YTD loss.
Despite delivering better-than-expected Q1 performance on May 21, shares of TJX plunged 2.9% after the earnings release. The company's comparable sales and customer transactions increased across all divisions, both in the U.S. and internationally, driving a 5.1% year-over-year revenue growth to $13.1 billion, slightly ahead of consensus estimates. Moreover, while its EPS of $0.92 declined 1.1% from the year-ago quarter, it topped the analyst estimates by 2.2%. The decline in profitability was primarily due to pressure on margins from higher SG&A expenses and increased cost of sales. Additionally, its operating cash flow decreased by a notable 46.5% year-over-year to $394 million, primarily due to elevated inventory levels, likely raising investor concerns.
Looking ahead to fiscal 2026, TJX expects comparable sales to increase by 2% to 3%, and projects EPS in the range of $4.34 to $4.43, representing an approximate 2% to 4% increase over the prior year.
For the current fiscal year, ending in January 2026, analysts expect TJX’s EPS to grow 5.2% year over year to $4.48. The company’s earnings surprise history is promising. It topped the consensus estimates in each of the last four quarters.
Among the 21 analysts covering the stock, the consensus rating is a "Strong Buy” which is based on 18 “Strong Buy,” one "Moderate Buy,” and two “Hold” ratings.
This configuration is more bullish than a month ago, with 17 analysts suggesting a “Strong Buy” rating.
On Jul. 29, AllianceBernstein Holding L.P. (AB) analyst Aneesha Sherman maintained a “Buy” rating on TJX and set a price target of $145, implying a 12.2% potential upside from the current levels.
The mean price target of $144.14 represents an 11.5% premium from TJX’s current price levels, while the Street-high price target of $164 suggests an upside potential of 26.9%.
