Costco and Three Additional Discount Retail Stocks to Keep an Eye on This Holiday Season
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 16 2025
0mins
Source: NASDAQ.COM
Overview of the Retail – Discount Stores Industry: This industry focuses on providing value-for-money products to price-conscious consumers, operating on a low-cost model that includes bulk purchasing and streamlined supply chains. It has shown resilience during economic downturns as consumers prioritize affordability.
Key Trends Impacting the Industry: Consumer spending is on the rise, driven by lower borrowing costs and the upcoming holiday season, while shoppers are increasingly seeking bargains, leading to a shift towards discount retailers. Additionally, omnichannel capabilities are enhancing customer reach, and margin discipline is crucial for maintaining profitability amid intense competition.
Zacks Industry Rank and Performance: The Retail – Discount Stores industry ranks #26 in the Zacks Industry Rank, indicating positive near-term prospects with a growing earnings outlook. However, it has underperformed compared to the broader Retail – Wholesale sector and the S&P 500 over the past year.
Highlighted Retail Discount Store Stocks: Key companies such as TJX Companies, Dollar General, Dollar Tree, and Costco are noted for their strong market positions and growth potential, with each showing positive sales and earnings projections for the current financial year.
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Analyst Views on TJX
Wall Street analysts forecast TJX stock price to rise
18 Analyst Rating
17 Buy
1 Hold
0 Sell
Strong Buy
Current: 151.310
Low
150.00
Averages
169.81
High
193.00
Current: 151.310
Low
150.00
Averages
169.81
High
193.00
About TJX
The TJX Companies, Inc. is an off-price apparel and home fashions retailer in the United States (U.S.) and worldwide. The Company's segments include Marmaxx and HomeGoods, both in the U.S., TJX Canada and TJX International, including Europe and Australia. The TJ Maxx and Marshalls chains sell family apparel, including footwear and accessories, home fashions, including home basics, decorative accessories, and giftware and other merchandise. The HomeGoods segment operates HomeGoods and Homesense chains. HomeGoods offers an eclectic assortment of home fashions, including furniture, rugs, lighting, soft home, decorative accessories, tabletop, and cookware, as well as expanded pet and gourmet food departments. The TJX Canada segment operates the Winners, HomeSense and Marshalls chains in Canada, offering a range of home decor, furniture, and seasonal home merchandise. The TJX International segment operates the TK Maxx and Homesense chains in Europe and the TK Maxx chain in Australia.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Rotation Insight: Jim Cramer highlights that the recent market rotation has created buying opportunities for high-quality stocks, as many quality companies have been pulled lower by institutional selling despite their unchanged fundamentals, urging investors to seize this moment.
- Stock Recommendations: Cramer specifically points to PepsiCo, suggesting that its recent pullback offers a favorable entry point ahead of its July 9 earnings report, while he also sees potential in Starbucks as its CEO works on a successful turnaround.
- Risky Investment Opportunities: For investors willing to take on more risk, Cramer emphasizes Constellation Brands, noting that despite ongoing concerns about spirits, its beer business appears to be stabilizing, making it worth a look.
- Consumer and AI Dynamics: Cramer mentions that TJX Companies will benefit from weakened consumer spending as an off-price retailer capitalizes on excess inventory from traditional retailers, while a rebound in AI stocks has negatively impacted healthcare stocks, including Johnson & Johnson.
See More
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- Investment Opportunity: CNBC's Jim Cramer highlighted that the latest market rotation presents buying opportunities for high-quality companies that have been unfairly dragged down by institutional selling, urging investors to seize this moment.
- Stock Recommendations: Cramer specifically mentioned Johnson & Johnson, PepsiCo, Starbucks, Constellation Brands, and TJX as stocks that are undervalued amid market fluctuations, making them worthy of investor attention.
- Market Dynamics: Following last week's jobs report indicating a slowdown in hiring, many large money managers repositioned their portfolios, leading to a drop in high-quality stock prices, which Cramer believes creates a favorable buying environment.
- Sector Impact: Cramer emphasized that discount retailers like TJX may benefit from weakened consumer spending, as excess inventory at traditional retailers provides them with more discounted merchandise, enhancing their competitive edge in the market.
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- Earnings Growth Expectations: TJX Companies anticipates a 19% to 21% increase in earnings per share (EPS) for the upcoming year, rising from last year's $4.26 to a projected $5.08 to $5.15, indicating strong consumer attraction despite economic challenges.
- Strong Sales Performance: For the fiscal first quarter ending May 2, same-store sales rose by 6%, and diluted EPS grew by 29% year-over-year to $1.19, surpassing management's expectations and demonstrating the company's competitiveness in a high-price, uncertain job market.
- Stock Price Potential Analysis: With a current share price of $151.50, assuming a 20% EPS increase to $5.44 and applying a 29 P/E ratio, the target price is approximately $158, suggesting about 4% upside; if growth accelerates to 25%, the target could reach $170, indicating a potential 12% gain.
- Long-term Investment Focus: Although TJX was not included in The Motley Fool Stock Advisor's top investment picks, its consistent performance exceeding expectations may offer long-term returns, prompting investors to closely monitor the company's future results and market trends.
See More
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- Optimistic Future Outlook: Management anticipates 3% to 4% same-store sales growth for the year, with EPS projected between $5.08 and $5.15, reflecting a 19% to 21% increase from last year's $4.26, providing shareholders with a stable earnings outlook.
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See More
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- Earnings Expectations: The upcoming earnings report is projected to show an EPS of $1.17, representing a 6.36% year-over-year increase, with anticipated revenue of $15.12 billion, indicating a 5.02% growth from the same quarter last year, showcasing the company's stable growth potential in the market.
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See More
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- Executive Changes Impact: Goldman Sachs served as the exclusive financial advisor for Martin Marietta's $13.5 billion acquisition of Lhoist North America and provided fully committed debt financing, showcasing its strong performance in investment banking, which could enhance its market position.
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