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TJX's 'Underlying Sales Momentum Is Humming,' According To Goldman

Goldman Sach’s Lindsay Mann commented on the weakness of TJX Companies Inc’s TJX 0.06% recent earnings report, but remained confident the company would succeed in the future. The analyst reiterated her Buy rating and $92 12-month price target.

Strategic Positioning To Grow Revenues

Mann believed TJX was a company positioned well for the ecommerce’s disruption into the retail environment.

“TJX is a structural beneficiary of the dislocation ecommerce is driving between brands and multi-line retailers, and off-price market share at 10% of total apparel is still small, while the long-term international opportunity is compelling,” stated Mann.

Margins Under Pressure

Although wage inflation and infrastructure investments have weighed in over several quarters, Mann believed company management understood these challenges well, exemplified by its Q2 conference call. Management forecasted wage inflation to dampen FY17 and FY18 EPS growth by 3 percent and new distribution center investments were expected to decrease operating margins by 0.50 percent.

Despite continued optimism in the stock, Mann lowered FY17 EPS from $3.2 to $3.55 and FY18 RPD from $3.98 to $3.92.

The stock closed at $77.97.

DateFirmActionFromTo
Aug 2016WedbushMaintainsOutperform
Aug 2016Goldman SachsAssumesBuy
May 2016BernsteinMaintainsOutperform

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