When Should You Buy The TJX Companies, Inc. (NYSE:TJX)?

Let's talk about the popular The TJX Companies, Inc. (NYSE:TJX). The company's shares had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of US$92.66 to US$101. However, is this the true valuation level of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at TJX Companies’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for TJX Companies

Is TJX Companies Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 6.58% above our intrinsic value, which means if you buy TJX Companies today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $89.40, there’s only an insignificant downside when the price falls to its real value. Furthermore, TJX Companies’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will TJX Companies generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. TJX Companies' earnings over the next few years are expected to increase by 21%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? TJX’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on TJX, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. While conducting our analysis, we found that TJX Companies has 2 warning signs and it would be unwise to ignore these.

If you are no longer interested in TJX Companies, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.