Last Update 12 Dec 25
Fair value Increased 10%TJX Strong Q3 Execution Will Drive Market Share Gains Ahead
TJX Companies fair value estimate has been raised from $164 to $181, as analysts point to strong Q3 results, raised long term guidance, resilient value positioning across categories, and continued market share and EPS growth potential supported by the off price sector backdrop.
Analyst Commentary
Bullish analysts broadly highlight TJX's strong Q3 performance, improved long term guidance, and durable value proposition as key drivers behind a wave of upward price target revisions. The consensus view is that the company is executing well across segments while positioning itself to capture incremental market share in the off price space.
Several firms have nudged targets higher across a range from the mid $140s to the high $170s, converging around the view that the current valuation can be supported by continued comparable sales strength, gross margin expansion, and sustained EPS outperformance versus prior expectations.
The tone of research commentary also underscores that TJX's category breadth and international footprint, including planned market entries, provide a multi year runway for growth, even against a dynamic macro backdrop.
Bullish Takeaways
- Multiple bullish analysts have raised price targets in response to strong Q3 results and raised multi year guidance, reinforcing confidence that current valuation multiples are underpinned by improving earnings power.
- Commentary points to TJX's ability to drive traffic and comparable sales while executing targeted pricing actions, supporting both revenue growth and margin resilience, which in turn supports higher fair value estimates.
- Off price sector tailwinds and an attractive buying environment are seen as structural advantages that enable TJX to gain market share from traditional department store peers and sustain EPS growth.
- Over the longer term, bullish analysts emphasize the incremental growth potential from newer banners and international expansion plans, viewing these as catalysts for an above market EPS compound annual growth rate and further upside to valuation.
What's in the News
- TJ Maxx launches the Maxxinista Express, a double decker bus tour bringing superfans on holiday themed shopping road trips across Los Angeles, Dallas, and Miami. The experience features store hopping, contests, and social media friendly photo moments (company product announcement).
- The company reports that between August 3, 2025 and November 1, 2025, it repurchased over 4.23 million shares for $593.6 million, completing a tranche totaling 4.84 million shares for $669.74 million under its February 26, 2025 buyback authorization (company buyback update).
- TJX raises its full year Fiscal 2026 outlook. It now expects consolidated comparable sales up 4%, pretax profit margin of 11.6%, and diluted EPS of $4.63 to $4.66 on sales of $59.7 billion to $59.9 billion (company guidance).
- For the fourth quarter of Fiscal 2026, TJX reiterates guidance for consolidated comparable sales growth of 2% to 3%, pretax profit margin of 11.7% to 11.8%, and diluted EPS of $1.33 to $1.36 (company guidance).
Valuation Changes
- The fair value estimate has risen from $164 to $181, reflecting a higher assessed intrinsic value for TJX shares.
- The discount rate has increased slightly from 8.30% to approximately 8.61%, indicating a modestly higher required return in the valuation model.
- The revenue growth assumption has edged down from about 7.60% to approximately 7.26%, suggesting slightly more conservative top line expectations.
- The net profit margin outlook has improved from roughly 9.30% to about 9.46%, pointing to a modestly more optimistic view on profitability.
- The future P/E multiple has moved higher from about 34.1x to approximately 36.0x, implying a somewhat richer earnings multiple applied in the updated valuation.
Key Takeaways
- Strategic global expansion and e-commerce enhancement are poised to drive sales growth and improve online presence.
- Smart buying strategies and operational investments are set to positively impact profitability and foster earnings growth.
- Rising operational costs from inflation and unfavorable foreign exchange rates may negatively affect TJX Companies' profit margins and overall profitability.
Catalysts
About TJX Companies- Operates as an off-price apparel and home fashions retailer worldwide.
- TJX Companies plans to expand their global store base significantly by opening new stores and expanding into new markets like Spain, which should drive future sales growth and increase revenue.
- The company is investing in its e-commerce platform by adding new categories and brands, which should enhance its online presence and drive higher revenues.
- Their strong mark-on performance, driven by smart buying strategies and favorable buying conditions, is expected to positively impact gross margins and improve profitability.
- TJX Companies is confident in its ability to capture market share due to its value leadership and flexible business model, which should support revenue growth and stabilize net margins.
- The company's ongoing store remodels and relocations, along with its investment in distribution networks, are expected to streamline operations and foster earnings growth.
TJX Companies Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- This narrative explores a more optimistic perspective on TJX Companies compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
- The bullish analysts are assuming TJX Companies's revenue will grow by 7.6% annually over the next 3 years.
- The bullish analysts assume that profit margins will increase from 8.5% today to 9.3% in 3 years time.
- The bullish analysts expect earnings to reach $6.6 billion (and earnings per share of $6.1) by about August 2028, up from $4.8 billion today. The analysts are largely in agreement about this estimate.
- In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 34.1x on those 2028 earnings, up from 30.7x today. This future PE is greater than the current PE for the US Specialty Retail industry at 18.8x.
- Analysts expect the number of shares outstanding to decline by 1.09% per year for the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 8.3%, as per the Simply Wall St company report.
TJX Companies Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- Unfavorable foreign exchange rates are expected to negatively impact TJX Companies' consolidated sales growth by 1% and earnings per share growth by 3%, which could affect overall revenue and profitability.
- The company anticipates a decrease in pretax profit margin due to a 10 to 20 basis point negative impact from foreign exchange rates, potentially affecting net margins and earnings.
- Incremental wage and payroll costs are leading to an increase in SG&A expenses, which is likely to affect net margins and overall profitability.
- A significant decrease in first-quarter pretax profit margin is anticipated due to the timing of expenses and past reserve releases, potentially impacting quarterly earnings.
- Persistent inflationary pressures on wages and potential rent inflation due to real estate competition may further increase operational costs, impacting net profit margins.
Valuation
How have all the factors above been brought together to estimate a fair value?- The assumed bullish price target for TJX Companies is $164.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of TJX Companies's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
- However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $164.0, and the most bearish reporting a price target of just $88.0.
- In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $71.0 billion, earnings will come to $6.6 billion, and it would be trading on a PE ratio of 34.1x, assuming you use a discount rate of 8.3%.
- Given the current share price of $132.95, the bullish analyst price target of $164.0 is 18.9% higher.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
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Disclaimer
AnalystHighTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystHighTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystHighTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
