UPDATE: BMO Capital Markets Reiterates TJX Companies at Market Perform on In-line Q3 EPS

In a report published Tuesday, BMO Capital Markets reiterated The TJX Companies Inc.

at Market Perform following in-line Q3 earnings and maintained a price target of $42. BMO Capital Markets noted, "TJX reported in-line 3Q EPS of $0.62 (including $0.03 in one-time charges). Guidance for a November comp gain of 1% to 2%, and flat to up 1% at the MaxMaxx group, appears conservative, but reflects Hurricane Sandy's impact, as well as unusually warm weather on the West Coast in the beginning of the month. However, we see room for upside, given that regions not affected by Sandy continued to comp up mid-single digits into early 4Q, sales on the East Coast have recovered to pre-storm run rates as the region has normalized, and the warm spell out West has since eased. For December and January, management expects comps to be flat to up 2% on both a consolidated basis and at MarMaxx. We continue to see opportunity for fourth-quarter upside driven by strong momentum, marketing improvements and strong consumer sentiment, and a higher percentage of freshness in stores. Inventory was down 14% per store, which we view positively, as it suggests TJX is likely chasing into more goods to support demand. [We] believe TJX can trade at approximately 15x-16x our FY2013 EPS estimate of $2.70. This equates to a 12-month price target of $42, and maintain our Market Perform rating on its shares." TJX Companies closed at $42.06 on Tuesday.