'Their Model Continues To Thrive': TJX Analysts React To Q3 Earnings Beat

TJX Companies Inc TJX shares are falling one day after the retailer reported a third-quarter earnings beat.

Morgan Stanley 

Analyst Kimberly Greenberger said she sees off-price share gains from department stores, specialty and discount retailers continuing.

“Off-price inventory availability appears plentiful. Imbalances at eCommerce retailers. Given high channel growth rates and inherent sales volatility, likely ensure a durable source of supply for the foreseeable future,” the analyst said. 

Morgan Stanley maintained an Overweight rating with a $62 price target.

Wells Fargo

Wells Fargo analyst Ike Boruchow said TJX managed to prove “yet again that the off-price sector remains incredibly healthy, and their model continues to thrive and take share, in spite of being the market-share leader.”

The primary bear case against the company this year surrounded its ability to sustain comp momentum as it faced difficult compares, the analyst said. 

“This thesis is now officially dead as MarMaxx beat plan as comps actually accelerated from 2Q despite tougher compares.”

Boruchow maintained a Market Perform rating and raised the price target from $54 to $60, adding that the fundamental story at TJX is hard to fight.

Credit Suisse

Analyst Michael Binetti said that in the midst of an increasingly tough U.S. softline retail backdrop, he was impressed by the company’s high quality third-quarter earnings beat.

“Significantly improved inventory availability should continue to be a comp tailwind for TJX in the near-term, and we expect off-price to remain a relative winner over holiday 2019/longer-term,” the analyst said. 

Credit Suisse maintained a Neutral rating and raised the price target from $60 to $62.

Wedbush

Analyst Jen Redding said she continues to view TJX as the leader in off-price retail and sees the sector as an area of strength in a market troubled by tariff concerns.

E-commerce cannot replace the off-price experience of shopping for bargains in physical stores, the analyst said. 

Wedbush maintained a Neutral rating with a $60 price target.

Baird

Analyst Mark Altschwager said that although shares have performed well in recent months, he continues to like the setup heading into the holiday season and beyond “given top-line momentum, easier upcoming comparisons, easing cost pressures and a favorable buying backdrop.”

The analyst said he remains bullish on the off-price sector and sees room for the company’s estimates and valuation to move higher.

Baird maintained an Outperform rating with a $63 price target.

Tigress

Tigress Financial Partners analyst Ivan Feinseth said he believes further upside exists from current levels and continues to recommend purchase of TJX shares.

“TJX’s strong results continue to be driven by traffic growth and robust apparel performance driven by the company’s ongoing strategy of continually rotating off-price branded apparel and other consumer products,” he said. 

“Q3 marks the company’s 22nd consecutive quarter of increases in customer traffic that continues to be driven by its rotating unique inventory and treasure-hunt shopping experience."

Price Action:

TJX shares were 2.23% higher at $59.32 at the close Wednesday. 

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