TJX Companies Inc. (NYSE: TJX) has continued to deliver standout performance, helping fuel a powerful rally in the stock and making it a Wall Street darling. However, given its strong run and more cautious outlook, investors may be wondering how much upside remains.
In an era where online shopping has become the default for many consumers, TJX has bucked the trend, showing that in-store shopping is still alive and well. Its off-price brands, including T.J. Maxx, Marshalls, and HomeGoods, have continued to thrive, a particularly impressive feat in the current climate, where weak consumer sentiment has led many lower- and middle-income shoppers to tighten their purse strings.
That sustained demand for TJX’s brands has helped fuel a long-term rise in its stock. Since the beginning of 2009, when shares were trading in the low single digits, the stock has trended higher.
It is now trading around $156, up about 120% over the last five years and more than 20% over the last 12 months.
A Strong Quarter Caps Off Another Impressive Year
TJX has delivered strong financial results for years, with earnings per share consistently surpassing estimates. The company’s most recent results continued the trend.
In its fiscal fourth-quarter 2026 earnings report on Feb. 25, TJX posted earnings of $1.43 per share, up from $1.23 in the prior year and 5 cents above Wall Street expectations. Revenue came in at $17.74 billion, rising nearly 9% year over year and exceeding estimates by roughly $383 million.
The company saw gains across both its home and apparel categories, driven by a higher average basket and an increase in customer transactions. During the quarter, consolidated comparable sales (comps) increased 5%, which the company said was well above its plan and followed a 5% increase last year. The company also reported an adjusted pre-tax profit margin of 12.2%, which was up 60 basis points from the previous year.
Company Issues More Cautious 2027 Guidance
Despite the strong quarter, shares of TJX dipped around 1% following the report, though the move was less about the results themselves and more about the company’s outlook.
While Chief Executive Ernie Herrman said in the earnings call that “Q1 is off to a strong start,” some investors were less enthusiastic about the company’s 2027 guidance, which suggested a more measured pace of growth.
For the first quarter of fiscal 2027, TJX said it expects consolidated comp sales to be up 2% to 3%, with a pretax profit margin of 10.3% to 10.4%, and diluted EPS of 97 cents to 99 cents.
For the full fiscal year, it expects consolidated comp sales to rise 2% to 3%, with a pretax profit margin of 11.7% to 11.8% and diluted EPS of $4.93 to $5.02.
Wall Street Remains Bullish on TJX
Analysts didn’t appear fazed by the guidance. After the earnings report, two analysts upgraded TJX, two reiterated Buy ratings, and two raised their price targets. Current sentiment remains positive across the board. Among the 25 analysts who have ratings on the stock, all have Buy ratings, including four Strong Buys.
That said, price targets suggest more modest upside from here. The average 12-month price target is $167.55, which suggests less than 10% upside from the current price. Of the 17 analysts who have price targets on the stock, five expect it to decline over the next year, with the lowest target at $133, nearly 15% below the current price. The remaining analysts, who expect the stock to rise over the next 12 months, have estimates ranging from $162 to $188. The highest target implies upside of around 19%.
Where Does Valuation Stand After the Run?
After such a long run higher, valuation may be starting to draw attention.
TJX currently trades at a price-to-earnings ratio of around 32X, which is above the broader retail industry average of about 25X. However, it is more in line with direct competitors like Ross Stores Inc. (NASDAQ: ROST) and Burlington Stores Inc. (NYSE: BURL), which both trade at roughly 34X.
Those peers have also seen strong stock performance. Ross shares are up more than 60% over the past year, while Burlington has gained more than 40%, highlighting the strength across the off-price retail space. On a price-to-sales basis, TJX trades at around 2.9X, compared with roughly 3.2X for Ross and about 1.7X for Burlington.
TJX’s Story Remains Strong, But Growth Could Moderate
The overall picture for TJX still looks strong. Its model clearly resonates with shoppers, which should continue to support steady traffic and consistent results.
That said, with guidance pointing to a more measured pace of growth, investors will likely be watching for the first-quarter fiscal 2027 earnings report on May 20 to get a better sense of how the year is shaping up.
Given TJX’s track record of beating expectations and Wall Street’s overwhelmingly bullish stance on the stock, there could still be upside from here. But after such a strong run, gains may come at a more moderate pace than what investors have seen in recent years.
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The article "Wall Street Loves TJX, But Is the Stock Still a Good Deal for Investors?" first appeared on MarketBeat.
