Equity research: TJX Companies, Inc

Few retailers operate at the scale of TJX. Through TJ Maxx, Marshalls, HomeGoods, Winners, TK Maxx and its other banners, the group runs more than 5,000 stores across the United States, Canada, Europe and Australia, supported by online platforms in the US and Europe. 

The business is built on off-price retail. TJX sells apparel and home fashions at prices that offer shoppers recognisable brands at good value, a combination that underpins its appeal across very different markets. 

Its sourcing model is a key driver. A large buying organisation and a wide network of vendors let TJX buy across multiple categories and regions, which keeps its stores stocked with a varied and changing mix of merchandise. 

That changing mix matters. Because the merchandise is refreshed so often, shoppers are encouraged to visit regularly, and the experience of browsing in store is one that online retail finds hard to reproduce. 

We believe this blend of value, scale and a constantly renewed offering gives TJX a competitive position that should prove durable. 

Valuation, price targets and outlook 

Calamatta Cuschieri rates TJX a Buy. Our full report sets out the price target, the discounted cash flow valuation behind it and the key factors shaping the outlook. 

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This equity research document is issued by Calamatta Cuschieri Investment Services Ltd “CCIS”. Newly issued research recommendations and target prices supersede previously published research.  

The financial instruments discussed are intended for retail clients however, they may not be suitable for all investors and investors must make their own informed decisions and seek their own advice regarding the appropriateness of investing in financial instruments or implementing strategies discussed herein. The value of the investment may go down as well as up and may be affected by changes in currency. Where investments are denominated in a currency other than the investor’s base or reporting currency, changes in foreign exchange rates may adversely affect the value and/or returns of the investment. Any performance figures quoted refer to the past and past performance is not a guarantee nor a reliable guide to future performance.   

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