Ross Stores and TJX Companies Earn Buy Rating
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Should l Buy TJX?
Source: seekingalpha
- Upgrade to Buy: Truist Securities has assigned a Buy rating to Ross Stores (ROST) and TJX Companies (TJX), with analyst Joseph Civello highlighting that the off-price retail model offers an attractive value proposition for brands, landlords, and consumers, allowing brands to benefit from efficient inventory management, landlords to enjoy stable foot traffic, and consumers to save up to 60% on popular merchandise.
- Strategic Partnership Benefits: Unlike traditional department stores, ROST and TJX do not seek markdown assistance or return unsold inventory to vendors, making them more strategic partners that can aggressively chase market trends, thereby enhancing cash flow flexibility for brands.
- Social Media Impact: Civello notes that platforms like Reddit and TikTok have increased visibility for off-price retailers, transforming consumer perception from a stigmatized necessity to a preferred shopping experience among younger generations, with increased content making these retailers standout beneficiaries.
- Positive Earnings Outlook: TJX is expected to report earnings of $1.00 per share on $14.01 billion in sales, reflecting year-over-year growth of 8.7% and 6.9%, while ROST is projected to earn $1.72 per share on $5.65 billion in revenue, up 17% and 13% year-over-year, indicating strong performance expectations.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy TJX?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
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: 150.250
Low
150.00
Averages
169.81
High
193.00
Current: 150.250
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.
TJX Companies Q1 Earnings Preview Scheduled
- Earnings Announcement Date: TJX is set to release its Q1 earnings on May 20 before market open, with consensus EPS estimated at $1.02 and revenue expected to reach $14.01 billion, reflecting a 6.9% year-over-year growth, indicating the company's resilience amid economic fluctuations.
- Historical Performance: Over the past two years, TJX has beaten both EPS and revenue estimates 100% of the time, showcasing its reliability in financial forecasting and market confidence, which could positively impact its stock price.
- Estimate Revision Dynamics: In the last three months, EPS estimates have seen 4 upward revisions and 8 downward adjustments, while revenue estimates experienced 7 upward and 4 downward revisions, reflecting market divergence regarding the company's future performance, which may influence investor decisions.
- Market Competition Analysis: Analysts note that while TJX excels in the off-price retail sector, it faces increasing price competition, which could lead to a gradual fade of its premium, prompting investors to closely monitor its market positioning and competitive strategies.
See More
Market Volatility and Interest Rate Impact
- Market Dynamics: On Tuesday, the market dipped slightly, with the S&P 500 on track for its third consecutive decline, primarily due to a rotation from AI-related stocks into software, although this trend lost momentum as the day progressed, exemplified by Salesforce's stock rising by $8 to $187 before turning negative, indicating fragile market sentiment.
- Rising Interest Rates: High energy prices, driven by uncertainty surrounding the Strait of Hormuz and the Iran conflict, have led to inflation fears rippling through the bond market, with the 10-year Treasury yield climbing to 4.665% and the 30-year yield hitting 5.19%, the highest level in nearly 19 years, which could suppress consumer spending and slow economic growth.
- Pharmaceutical Outlook: A Citigroup survey revealed that about 50% of surveyed endocrinologists expect oral GLP-1 medications to attract new patients, with many previously discontinued injectable users considering a return to oral options, positively supporting Eli Lilly's Foundayo drug's market growth prospects, with projected sales hitting $2.8 billion by 2026, significantly above the consensus estimate of $1.5 billion.
- Google Developer Conference: During the Google I/O developer conference, CEO Sundar Pichai announced that monthly active users of the Gemini AI app have exceeded 900 million, with daily requests increasing more than sevenfold, although Alphabet's shares fell over 1% in afternoon trading, the introduction of new AI features like Gmail Live and Doc Live demonstrates Google's ongoing innovation in AI, which may positively impact future market performance.
See More
Analysis of THRO's 52-Week High and Low Points
- Price Fluctuation Analysis: THRO's 52-week low is $33.23 per share, with a high of $42.95, and the last trade at $41.78 indicates the stock is nearing its high, potentially attracting investor interest.
- Technical Analysis Tool: Comparing the current share price to the 200-day moving average provides investors with deeper insights for technical analysis, aiding in more informed investment decisions.
- ETF Trading Mechanism: Exchange-traded funds (ETFs) trade like stocks, where investors buy and sell 'units' that can be created or destroyed based on demand, impacting the liquidity of underlying assets.
- Inflows and Outflows Monitoring: Weekly monitoring of changes in shares outstanding for ETFs highlights significant inflows or outflows, where inflows necessitate purchasing underlying assets, while outflows may lead to selling, thus affecting the ETF's components.
See More
Retail Stocks Under Pressure as Earnings Reports Loom
- Retail Sector Decline: The S&P Retail Select Industry Index has dropped nearly 7% year-to-date, with the State Street SPDR S&P Retail ETF (XRT) following suit, indicating significant weakness in the retail sector and escalating investor concerns about consumer health.
- Consumer Sentiment Weakness: The University of Michigan's consumer sentiment survey hit an all-time low in May, reflecting a significant decline in consumer spending willingness under the pressures of high inflation and rising energy costs, which could adversely affect retailers' profitability.
- Pessimistic Earnings Outlook: Home Depot is expected to report first-quarter earnings per share of $3.41, while Lowe's and TJ Maxx are projected at $2.97 and $1.02 respectively, with analysts expressing skepticism about the retail sector's ability to achieve 20% earnings growth amid negative wage growth.
- Rising Consumer Credit Risks: The New York Fed reported that total household debt rose to $18.8 trillion in Q1, with credit card debt nearing all-time highs and personal savings rates dropping to 3.6%, indicating a deteriorating financial situation for consumers that may lead to further declines in demand.
See More
Key Highlights from Monday's Investing Club Meeting
- Software Stocks Surge: On Monday, investors rotated back into software stocks, with Salesforce and ServiceNow rising approximately 3% and 6.5%, respectively, indicating strong performance in the software sector while AI hardware and data center stocks pulled back, reflecting a shift in market themes.
- Opportunity in TJX: TJX Companies' stock pulled back about 10% from recent highs, and Jim sees this as a buying opportunity, especially as consumers become more price-conscious amid inflation, potentially benefiting TJX as struggling retailers look to clear excess inventory.
- Challenges for Home Depot: Home Depot is set to report earnings, with its stock down roughly 8.5% this month; Jim noted that while broader housing market concerns weigh on its performance, the company's fundamentals remain strong, suggesting resilience in its upcoming report.
- Market Snapshot: Stocks mentioned in Monday's rapid-fire segment included Intel, Nextera, Berkshire Hathaway, and Salesforce, highlighting a focus on diversified investments, with Jim's Investing Club maintaining long positions in these stocks.
See More
Ross Stores and TJX Companies Earn Buy Rating
- Upgrade to Buy: Truist Securities has assigned a Buy rating to Ross Stores (ROST) and TJX Companies (TJX), with analyst Joseph Civello highlighting that the off-price retail model offers an attractive value proposition for brands, landlords, and consumers, allowing brands to benefit from efficient inventory management, landlords to enjoy stable foot traffic, and consumers to save up to 60% on popular merchandise.
- Strategic Partnership Benefits: Unlike traditional department stores, ROST and TJX do not seek markdown assistance or return unsold inventory to vendors, making them more strategic partners that can aggressively chase market trends, thereby enhancing cash flow flexibility for brands.
- Social Media Impact: Civello notes that platforms like Reddit and TikTok have increased visibility for off-price retailers, transforming consumer perception from a stigmatized necessity to a preferred shopping experience among younger generations, with increased content making these retailers standout beneficiaries.
- Positive Earnings Outlook: TJX is expected to report earnings of $1.00 per share on $14.01 billion in sales, reflecting year-over-year growth of 8.7% and 6.9%, while ROST is projected to earn $1.72 per share on $5.65 billion in revenue, up 17% and 13% year-over-year, indicating strong performance expectations.
See More
TJX Companies Q1 Earnings Preview Scheduled
- Earnings Announcement Date: TJX is set to release its Q1 earnings on May 20 before market open, with consensus EPS estimated at $1.02 and revenue expected to reach $14.01 billion, reflecting a 6.9% year-over-year growth, indicating the company's resilience amid economic fluctuations.
- Historical Performance: Over the past two years, TJX has beaten both EPS and revenue estimates 100% of the time, showcasing its reliability in financial forecasting and market confidence, which could positively impact its stock price.
- Estimate Revision Dynamics: In the last three months, EPS estimates have seen 4 upward revisions and 8 downward adjustments, while revenue estimates experienced 7 upward and 4 downward revisions, reflecting market divergence regarding the company's future performance, which may influence investor decisions.
- Market Competition Analysis: Analysts note that while TJX excels in the off-price retail sector, it faces increasing price competition, which could lead to a gradual fade of its premium, prompting investors to closely monitor its market positioning and competitive strategies.
See More
Market Volatility and Interest Rate Impact
- Market Dynamics: On Tuesday, the market dipped slightly, with the S&P 500 on track for its third consecutive decline, primarily due to a rotation from AI-related stocks into software, although this trend lost momentum as the day progressed, exemplified by Salesforce's stock rising by $8 to $187 before turning negative, indicating fragile market sentiment.
- Rising Interest Rates: High energy prices, driven by uncertainty surrounding the Strait of Hormuz and the Iran conflict, have led to inflation fears rippling through the bond market, with the 10-year Treasury yield climbing to 4.665% and the 30-year yield hitting 5.19%, the highest level in nearly 19 years, which could suppress consumer spending and slow economic growth.
- Pharmaceutical Outlook: A Citigroup survey revealed that about 50% of surveyed endocrinologists expect oral GLP-1 medications to attract new patients, with many previously discontinued injectable users considering a return to oral options, positively supporting Eli Lilly's Foundayo drug's market growth prospects, with projected sales hitting $2.8 billion by 2026, significantly above the consensus estimate of $1.5 billion.
- Google Developer Conference: During the Google I/O developer conference, CEO Sundar Pichai announced that monthly active users of the Gemini AI app have exceeded 900 million, with daily requests increasing more than sevenfold, although Alphabet's shares fell over 1% in afternoon trading, the introduction of new AI features like Gmail Live and Doc Live demonstrates Google's ongoing innovation in AI, which may positively impact future market performance.
See More
Analysis of THRO's 52-Week High and Low Points
- Price Fluctuation Analysis: THRO's 52-week low is $33.23 per share, with a high of $42.95, and the last trade at $41.78 indicates the stock is nearing its high, potentially attracting investor interest.
- Technical Analysis Tool: Comparing the current share price to the 200-day moving average provides investors with deeper insights for technical analysis, aiding in more informed investment decisions.
- ETF Trading Mechanism: Exchange-traded funds (ETFs) trade like stocks, where investors buy and sell 'units' that can be created or destroyed based on demand, impacting the liquidity of underlying assets.
- Inflows and Outflows Monitoring: Weekly monitoring of changes in shares outstanding for ETFs highlights significant inflows or outflows, where inflows necessitate purchasing underlying assets, while outflows may lead to selling, thus affecting the ETF's components.
See More
Retail Stocks Under Pressure as Earnings Reports Loom
- Retail Sector Decline: The S&P Retail Select Industry Index has dropped nearly 7% year-to-date, with the State Street SPDR S&P Retail ETF (XRT) following suit, indicating significant weakness in the retail sector and escalating investor concerns about consumer health.
- Consumer Sentiment Weakness: The University of Michigan's consumer sentiment survey hit an all-time low in May, reflecting a significant decline in consumer spending willingness under the pressures of high inflation and rising energy costs, which could adversely affect retailers' profitability.
- Pessimistic Earnings Outlook: Home Depot is expected to report first-quarter earnings per share of $3.41, while Lowe's and TJ Maxx are projected at $2.97 and $1.02 respectively, with analysts expressing skepticism about the retail sector's ability to achieve 20% earnings growth amid negative wage growth.
- Rising Consumer Credit Risks: The New York Fed reported that total household debt rose to $18.8 trillion in Q1, with credit card debt nearing all-time highs and personal savings rates dropping to 3.6%, indicating a deteriorating financial situation for consumers that may lead to further declines in demand.
See More
Key Highlights from Monday's Investing Club Meeting
- Software Stocks Surge: On Monday, investors rotated back into software stocks, with Salesforce and ServiceNow rising approximately 3% and 6.5%, respectively, indicating strong performance in the software sector while AI hardware and data center stocks pulled back, reflecting a shift in market themes.
- Opportunity in TJX: TJX Companies' stock pulled back about 10% from recent highs, and Jim sees this as a buying opportunity, especially as consumers become more price-conscious amid inflation, potentially benefiting TJX as struggling retailers look to clear excess inventory.
- Challenges for Home Depot: Home Depot is set to report earnings, with its stock down roughly 8.5% this month; Jim noted that while broader housing market concerns weigh on its performance, the company's fundamentals remain strong, suggesting resilience in its upcoming report.
- Market Snapshot: Stocks mentioned in Monday's rapid-fire segment included Intel, Nextera, Berkshire Hathaway, and Salesforce, highlighting a focus on diversified investments, with Jim's Investing Club maintaining long positions in these stocks.
See More
Ross Stores and TJX Companies Earn Buy Rating
- Upgrade to Buy: Truist Securities has assigned a Buy rating to Ross Stores (ROST) and TJX Companies (TJX), with analyst Joseph Civello highlighting that the off-price retail model offers an attractive value proposition for brands, landlords, and consumers, allowing brands to benefit from efficient inventory management, landlords to enjoy stable foot traffic, and consumers to save up to 60% on popular merchandise.
- Strategic Partnership Benefits: Unlike traditional department stores, ROST and TJX do not seek markdown assistance or return unsold inventory to vendors, making them more strategic partners that can aggressively chase market trends, thereby enhancing cash flow flexibility for brands.
- Social Media Impact: Civello notes that platforms like Reddit and TikTok have increased visibility for off-price retailers, transforming consumer perception from a stigmatized necessity to a preferred shopping experience among younger generations, with increased content making these retailers standout beneficiaries.
- Positive Earnings Outlook: TJX is expected to report earnings of $1.00 per share on $14.01 billion in sales, reflecting year-over-year growth of 8.7% and 6.9%, while ROST is projected to earn $1.72 per share on $5.65 billion in revenue, up 17% and 13% year-over-year, indicating strong performance expectations.
See More
