TD Cowen maintains TJX stock Buy rating, $138 target

On Monday, TD Cowen affirmed its positive stance on The TJX Companies (NYSE:TJX), with analyst John Kernan maintaining a Buy rating and a price target of $138.00. Kernan’s outlook for the company is based on a series of positive indicators, including sustained strength in the Marmaxx segment and a robust performance during the holiday season, which are expected to carry into the fiscal year 2026. According to InvestingPro data, TJX maintains a perfect Piotroski Score of 9 and demonstrates strong financial health with an overall score of "GOOD," supporting the positive outlook. The company appears to be trading above its Fair Value based on comprehensive analysis.

The analyst pointed out that TJX’s valuation is rising, now trading at a higher multiple compared to its off-price retail peers. This valuation reflects the market’s optimism about the company’s competitive position and long-term prospects. The price target set by TD Cowen represents a multiple of 26 times the firm’s fiscal year 2027 estimated earnings per share (EPS) and 18 times the estimated enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA). Current InvestingPro metrics show a P/E ratio of 28.34 and revenue growth of 7.83% over the last twelve months. The company has also maintained dividend payments for 46 consecutive years, with a current yield of 1.24%.

Kernan highlighted that TJX is trading at a price-to-earnings (P/E) ratio of 27 times based on consensus estimates for the second fiscal year, which is a slight 3% premium over Burlington Stores, Inc. (NYSE:BURL) at 26 times and a significant 30% premium over Ross Stores, Inc. (NASDAQ:ROST) at 21 times. According to the analysis, there is potential for a modest re-rating of TJX’s valuation in the near term if the initial guidance for fiscal year 2026 proves conservative.

The positive commentary from TD Cowen comes as TJX continues to demonstrate a robust competitive position in the off-price retail sector. With a strong exit rate into fiscal year 2026, the company’s performance and strategic positioning are poised to support continued momentum, as reflected in the maintained $138 price target.

In other recent news, The TJX Companies have been experiencing strong sales momentum, exceeding their fourth-quarter guidance with same-store sales growing by 2-3%. Evercore ISI maintained an Outperform rating on TJX, citing robust inventory availability and positive customer spending trends as key factors for the retailer’s strong performance. TD Cowen also expressed confidence in TJX, raising the price target to $138 and maintaining a Buy rating, highlighting the company’s ability to capture market share and expand margins. Similarly, Guggenheim increased its price target for TJX to $140, reiterating a Buy rating based on the company’s consistent performance and strategic focus on financial outcomes. Baird echoed this optimism, raising their price target to $138 and emphasizing the company’s market share gains and strong product assortments.

Analysts from Bernstein noted a positive start to the holiday quarter for U.S. apparel retailers, including TJX, partly due to favorable weather changes and a recovery in spending among higher-income consumers. The Evercore ISI 2024 Holiday Survey suggested that HomeGoods, a division of TJX, might be a significant winner this holiday season, further boosting the company’s performance. Internationally, TJX has shown strong growth in regions like EMEA and APAC, contributing to its solid global presence. Overall, these developments indicate a promising outlook for TJX as the year progresses.

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