Goldman Sachs: TJX Companies A 'Source Of Opportunity,' Shares Added To Conviction List

Stephen Grambling of Goldman Sachs upgraded shares of

to Buy from Neutral with a $77 price target. At the same time, the analyst added shares to Goldman Sachs “Conviction List.” “TJX Companies' global off-price model positions it well as a disruptor and compounder with a double-digit earnings per share growth algorithm for the next decade consisting of low-single-digit to mid-single-digit comp growth,” Grambling wrote in a note on Wednesday. The analyst adds that the company will also benefit from square footage growth, operating margin expansion and share buybacks. According to Grambling, TJX Companies will be a beneficiary of the unresolved west coast port issue, lower fuel prices and what the analyst believes to be an ongoing inventory disruption at mid-tier retailers caused by a shift to online. “The corresponding top and bottom-line upside should return TJX Companies to a beat-and-raise scenario over the next year,” Grambling added while noting that the company's International prospects are “under-appreciated” by the investment community. Grambling concludes that TJX Companies has the most attractive combination of free cash flow with 5.8 percent yield. The analyst adds that the company's 26 percent pre-tax return on invested capital ranks best among Broadlines and Supermarkets under coverage.