January 4, 2018

Wall Street split on TJX outlook

Grant Welker
TJX offices in Framingham. One Wall Street analyst said this week the company may be hurt by broader industry trends, while another firm said it should rebound from its third-quarter results.

Two Wall Street analysts have come out this week with takes on TJX stock, and they're divided on their optimism for the MetroWest retailer.

Wells Fargo analyst Ike Boruchow downgraded his outlook for TJX from "buy" to "hold" on Wednesday, citing the end of several trends helpining the off-price sector, including an eagerness by retailers and department stores to sell excess inventory to chains like TJX's Marshalls and T.J.Maxx.

Brands are less likely now to rely on off-price sales to consumers, Boruchow said.

The research firm William Blair, on the other hand, said TJX should at least match Wall Street's expectations for the company, which has headquarters in Framingham and Marlborough.

TJX reported in November a 17-percent profit increase for the third quarter, but comparable store sales were flat and the company's stock fell as Wall Street expected better results.

William Blair analysts said third-quarter issues at TJX have likely been corrected, based on the retailer's history of quickly fixing issues in the past.

The relatively disappointing third quarter didn't keep TJX from projecting diluted earnings per share in the fourth quarter to be in the range of $1.25 to $1.27, a 21- to 23-percent increase over the prior year. TJX stock fell from $76.69 at the end of trading Tuesday to $74.55 Thursday morning.

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