TJX Companies Inc (NYSE:TJX)'s long record of outperforming expectations positions the off-price retailer for further gains as it leans into pricing power, international growth and an expanding store base, according to analysts at Bank of America.
Analysts said TJX’s ability to consistently beat sales and margin forecasts is “rare” in the current retail landscape and should continue to support multiple expansion.
The firm expects the owner of TJ Maxx, Marshalls and HomeGoods to maintain its trend of low- to mid-single-digit comparable sales growth, helped by strong inventory availability and a branded merchandise assortment that continues to attract value-seeking shoppers.
Bank of America highlighted pricing as a new tailwind for margins, particularly at Marmaxx, which includes the TJ Maxx and Marshalls chains in the US. The brokerage models operating margin rising to 12% by fiscal 2028, noting that higher ticket prices could add further upside as tariffs push prices higher across key categories.
TJX spent years lowering prices amid competitive pressures, a period that contributed to margin contraction from fiscal 2015 to 2020, the analysts noted. “The opposite of that could happen now,” they wrote, as industry-wide tariff-driven increases create room for TJX to take price while still offering relative value.
International and HomeGoods divisions also present opportunities for margin improvement, according to the note.
Bank of America said TJX’s long-tenured buying organization remains a competitive advantage, allowing the retailer to secure ample branded inventory even as tariffs disrupt supply chains. The backdrop, it said, is shaping up to be “a highly favorable environment for merchandise availability” heading into the holiday season.
The analysts also pointed to store expansion as a steady contributor to growth. TJX is targeting 7,000 stores across current and planned geographies, up from 5,191 today. New HomeGoods and international locations are expected to account for most of that expansion, resulting in a 2% to 3% annual lift to total sales from new stores.
“We see opportunity for sales growth from trade down and margin expansion from higher prices, international and HomeGoods,” Bank of America wrote.
Bank of America reiterated its “Buy” rating and $168 price objective on TJX stock, which was trading around $150 on Thursday afternoon.