TJX stock price target cut to $137 at TD Cowen

On Thursday, TD Cowen revised its price target on shares of The TJX Companies (NYSE:TJX) to $137.00, slightly down from the previous $138.00, while reiterating a Buy rating on the stock. The adjustment comes despite the analyst’s positive outlook on the company’s performance and future prospects. Currently trading at $124.04, TJX shows strong momentum, trading near its 52-week high of $128.00, though InvestingPro analysis suggests the stock is currently trading above its Fair Value.

In a recent statement, the analyst from TD Cowen praised The TJX Companies for its robust business model in the softlines retail sector, which has shown resilience against macroeconomic challenges. The company reported a 50 basis point increase in EBIT margin for fiscal year 2025, achieved on a 4% comparable store sales increase, even after accounting for an extra week in the previous year. With a market capitalization of $139.28 billion and an impressive "GOOD" financial health rating from InvestingPro, TJX maintains its position as a prominent player in the Specialty Retail industry.

The TJX Companies’ ability to find gross margin opportunities through improved mark-on, shrink reduction, and efficient buying and occupancy management was highlighted as a key strength. The analyst also noted the company’s effective control over selling, general, and administrative (SG&A) expenses.

Encouraging signs were observed in customer traffic, the buying environment, and inventory availability, which the analyst believes points to a high level of confidence in the company’s continued success. The TJX Companies exceeded the high end of its initial earnings per share (EPS) guidance by 6% in fiscal year 2025, suggesting potential for ongoing relative outperformance.

Looking ahead to fiscal year 2026, the analyst sees potential for the company to surpass expectations and raise forecasts. The discounted cash flow (DCF) analysis supports the new price target of $137, which corresponds to approximately 27 times the firm’s estimated earnings for fiscal year 2027 and 18 times its projected enterprise value to EBITDA ratio. The company’s current P/E ratio of 28.8x reflects investor confidence, while its remarkable 46-year streak of maintaining dividend payments demonstrates long-term stability. For deeper insights into TJX’s valuation and growth prospects, InvestingPro offers comprehensive analysis with 12 additional exclusive ProTips and detailed financial metrics.

Despite an anticipated increase in capital expenditures to 3.7% of sales for fiscal year 2026, representing a 15% year-over-year rise and the highest rate since fiscal year 2013, TD Cowen maintains a projection for The TJX Companies to reach a record $5.4 billion in free cash flow (FCF) by fiscal year 2027.

In other recent news, The TJX Companies have reported a strong performance in their fourth-quarter 2025 earnings, surpassing analyst expectations. The company achieved an earnings per share (EPS) of $1.23, exceeding the forecasted $1.16, and reported revenue of $16.35 billion, which was above the anticipated $16.19 billion. This marks a 10% increase in diluted EPS and a 5% year-over-year revenue growth, reflecting robust performance across all business segments, particularly in apparel and home categories.

BMO Capital Markets has responded to these results by raising its price target for TJX Companies to $145 from the previous $133, while maintaining an Outperform rating. The firm’s analyst views TJX as a growth compounder, suggesting continued relevance for consumers and brands. Despite the positive earnings, TJX management has set conservative guidance for the upcoming quarter and full year, citing initial unfavorable weather conditions that are expected to improve.

Looking ahead, TJX plans to open 130 new stores in fiscal 2026, with projections for comp store sales growth of 2-3% and consolidated sales between $58.1 billion and $58.6 billion. The company remains optimistic about its long-term store targets and the availability of attractive merchandise. Analysts and investors alike are closely watching these developments as TJX continues to expand its market presence and enhance customer experience across various regions.

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