1. No category

February 1, 2015
NYSE: TJX
TJX COMPANIES INC
BUY
A+
A
A-
HOLD
B+
B
Annual Dividend Rate
$0.70
B-
C+
C
Annual Dividend Yield
1.03%
SELL
C-
D+
D
Beta
0.62
Sector: Consumer Goods & Svcs
TJX BUSINESS DESCRIPTION
The TJX Companies, Inc. operates as an off-price
apparel and home fashions retailer in the United
States and internationally. The company operates
in four segments: Marmaxx, HomeGoods, TJX
Canada, and TJX Europe.
STOCK PERFORMANCE (%)
3 Mo.
Price Change
7.79
Weekly Price: (US$)
D-
E+
E
E-
F
Market Capitalization
$46.6 Billion
52-Week Range
$51.91-$69.84
Sub-Industry: Apparel Retail
SMA (50)
BUY
RATING SINCE
TARGET PRICE
04/08/2009
$78.09
Price as of 1/29/2015
$67.61
Source: S&P
SMA (100)
1 Year
2 Years
80
TARGET
TARGET
TARGETPRICE
PRICE$78.09
$78.09
PRICE
$78.09
TARGET
75
70
65
60
1 Yr.
18.09
3 Yr (Ann)
26.14
55
50
GROWTH (%)
Last Qtr
5.50
-4.45
-1.17
Revenues
Net Income
EPS
12 Mo.
4.55
-0.50
2.36
3 Yr CAGR
7.80
16.61
20.54
Ind Avg
29.13
23.29
18.79
S&P 500
14.59
13.97
13.23
40
Rating History
BUY
Volume in Millions
RETURN ON EQUITY (%)
TJX
49.13
52.37
51.26
Q3 2014
Q3 2013
Q3 2012
45
50
25
2013
2014
2015
0
COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History
P/E COMPARISON
RECOMMENDATION
We rate TJX COMPANIES INC (TJX) a BUY. This is based on the convergence of positive investment
measures, which should help this stock outperform the majority of stocks that we rate. The company's
strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, largely
solid financial position with reasonable debt levels by most measures and notable return on equity. We feel
these strengths outweigh the fact that the company has had sub par growth in net income.
22.31
27.71
19.08
TJX
Ind Avg
S&P 500
2012
2013
Q3 0.85
Q2 0.73
Q1 0.64
Q4 0.81
Q3 0.86
Q2 0.66
TJX COMPANIES INC' earnings per share from the most recent quarter came in slightly below the year earlier
quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS
growth in the coming year. During the past fiscal year, TJX COMPANIES INC increased its bottom line by
earning $2.95 versus $2.55 in the prior year. This year, the market expects an improvement in earnings ($3.13
versus $2.95).
Q1 0.62
Q4 0.82
Q3 0.62
Q2 0.56
Q1 0.55
EPS ANALYSIS¹ ($)
HIGHLIGHTS
Despite its growing revenue, the company underperformed as compared with the industry average of 9.8%.
Since the same quarter one year prior, revenues slightly increased by 5.5%. This growth in revenue does not
appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the
company's weak earnings results. Turning our attention to the future direction of the stock, it goes without
saying that even the best stocks can fall in an overall down market. However, in any other environment, this
stock still has good upside potential despite the fact that it has already risen in the past year.
2014
NA = not available NM = not meaningful
1 Compustat fiscal year convention is used for all fundamental
data items.
The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying that there has been
successful management of debt levels. Despite the fact that TJX's debt-to-equity ratio is low, the quick ratio,
which is currently 0.61, displays a potential problem in covering short-term cash needs.
The company's current return on equity has slightly decreased from the same quarter one year prior. This
implies a minor weakness in the organization. Compared to other companies in the Specialty Retail industry
and the overall market, TJX COMPANIES INC's return on equity significantly exceeds that of both the industry
average and the S&P 500.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 1, 2015
PAGE 1
February 1, 2015
NYSE: TJX
TJX COMPANIES INC
Sector: Consumer Goods & Svcs Apparel Retail Source: S&P
Annual Dividend Rate
$0.70
Annual Dividend Yield
1.03%
PEER GROUP ANALYSIS
Market Capitalization
$46.6 Billion
52-Week Range
$51.91-$69.84
Price as of 1/29/2015
$67.61
INDUSTRY ANALYSIS
The specialty retail industry includes very well-known home improvement, apparel, automotive, and other
narrow-focus stores such as Home Depot (HD), TJX Companies (TJX), Lowe’s Companies (LOW), Gap (GPS),
Bed Bath & Beyond (BBBY), Ross Stores (ROST), Limited Brands (LTD), O’Reilly Automotive (ORLY), PetSmart
(PETM), Carmax (KMX), and Build-A-Bear Workshop (BBW).
REVENUE GROWTH AND EBITDA MARGIN*
16%
Beta
0.62
MW
V
FA
AB
OR
LE
The variety of product focuses targeted by specialty retail companies is very diverse. These include but are
not limited to home improvement goods, pharmaceutical & beauty, shoes, electronics, and office supplies.
Also included are stores narrowly focused on music, books, wine, games, rentals, vitamins, lumber, sporting
goods, toys, jewelry, and fashion apparel for men, women, and teddy bears.
ROST
URBN
TJX
Some of the larger specialty retail companies also profit from the extension of credit to their customers with
branded credit cards.
LB
DSW
UN
R
VO
FA
CHS
Companies in this industry are judged based on the metric of same-store sales, a measurement that shows if
stores open for more than one year are increasing top line revenue or shrinking.
GPS
BKE
-4%
LE
AB
Revenue Growth (TTM)
FL
AEO
7.5%
25%
EBITDA Margin (TTM)
Companies with higher EBITDA margins and
revenue growth rates are outperforming companies
with lower EBITDA margins and revenue growth
rates. Companies for this scatter plot have a market
capitalization between $2.3 Billion and $46.6 Billion.
Companies with NA or NM values do not appear.
*EBITDA – Earnings Before Interest, Taxes, Depreciation and
Amortization.
16%
REVENUE GROWTH AND EARNINGS YIELD
MW
PEER GROUP: Specialty Retail
V
FA
AB
OR
Ticker
TJX
FL
URBN
DSW
AEO
CHS
LB
BKE
MW
ROST
GPS
Recent
Company Name
Price ($)
TJX COMPANIES INC
67.61
FOOT LOCKER INC
54.35
URBAN OUTFITTERS INC
35.39
DSW INC
36.23
AMERN EAGLE OUTFITTERS INC
14.29
CHICOS FAS INC
16.60
L BRANDS INC
86.38
BUCKLE INC
51.42
MENS WEARHOUSE INC
47.30
ROSS STORES INC
93.63
GAP INC
42.30
Market
Cap ($M)
46,577
7,722
4,659
2,916
2,779
2,539
25,282
2,488
2,275
19,521
17,917
Price/
Earnings
22.31
16.18
20.94
22.09
95.27
26.35
26.58
15.30
525.56
22.08
15.05
Net Sales
TTM ($M)
28,583.24
7,031.00
3,217.89
2,427.16
3,252.72
2,628.54
11,203.00
1,138.60
2,884.74
10,750.02
16,302.00
Net Income
TTM ($M)
2,149.19
495.00
240.81
150.63
29.22
96.12
967.00
161.74
5.09
894.15
1,250.00
LE
The peer group comparison is based on Major Apparel Retail companies of comparable size.
FL
R
VO
FA
-4%
LE
AB
0%
URBN
LB TJX
DSW
UN
Revenue Growth (TTM)
ROST
AEO
CHS
GPS
BKE
7%
Earnings Yield (TTM)
Companies that exhibit both a high earnings yield
and high revenue growth are generally more
attractive than companies with low revenue growth
and low earnings yield. Companies for this scatter
plot have revenue growth rates between -3.8% and
14.4%. Companies with NA or NM values do not
appear.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 1, 2015
PAGE 2
February 1, 2015
NYSE: TJX
TJX COMPANIES INC
Sector: Consumer Goods & Svcs Apparel Retail Source: S&P
Annual Dividend Rate
$0.70
Annual Dividend Yield
1.03%
COMPANY DESCRIPTION
The TJX Companies, Inc. operates as an off-price apparel
and home fashions retailer in the United States and
internationally. The company operates in four segments:
Marmaxx, HomeGoods, TJX Canada, and TJX Europe. Its
apparel and home fashions chains sell family apparel,
including footwear and accessories; fine jewelry and
accessories; and home fashions comprising home basics,
accent furniture, lamps, rugs, wall decor, decorative
accessories, and giftware, as well as other merchandise.
The company operates its stores under the T.J. Maxx,
Marshalls, HomeGoods, Winners, HomeSense, T.K.
Maxx, and Sierra Trading Post trademarks. The TJX
Companies, Inc. also sells its products through
tjmaxx.com and SierraTradingPost.com in the United
States, as well as through tkmaxx.com in Europe. As of
February 1, 2014, it operated 1,079 T.J. Maxx, 942
Marshalls, 450 HomeGoods, and 4 Sierra Trading Post
stores in the United States; 227 Winners, 91
HomeSense, and 27 Marshalls stores in Canada; and 371
T.K. Maxx and 28 HomeSense stores in Europe. The
company was founded in 1956 and is headquartered in
Framingham, Massachusetts.
TJX COMPANIES INC
770 Cochituate Road
Framingham, MA 01701
USA
Phone: 508-390-1000
http://www.tjx.com
Beta
0.62
Market Capitalization
$46.6 Billion
52-Week Range
$51.91-$69.84
Price as of 1/29/2015
$67.61
STOCK-AT-A-GLANCE
Below is a summary of the major fundamental and technical factors we consider when determining our
overall recommendation of TJX shares. It is provided in order to give you a deeper understanding of our
rating methodology as well as to paint a more complete picture of a stock's strengths and weaknesses. It is
important to note, however, that these factors only tell part of the story. To gain an even more comprehensive
understanding of our stance on the stock, these factors must be assessed in combination with the stock’s
valuation. Please refer to our Valuation section on page 5 for further information.
FACTOR
SCORE
5.0
Growth
out of 5 stars
weak
Measures the growth of both the company's income statement and
cash flow. On this factor, TJX has a growth score better than 90% of the
stocks we rate.
strong
4.5
Total Return
out of 5 stars
weak
Measures the historical price movement of the stock. The stock
performance of this company has beaten 80% of the companies we
cover.
strong
5.0
Efficiency
out of 5 stars
weak
Measures the strength and historic growth of a company's return on
invested capital. The company has generated more income per dollar of
capital than 90% of the companies we review.
strong
5.0
Price volatility
out of 5 stars
weak
Measures the volatility of the company's stock price historically. The
stock is less volatile than 90% of the stocks we monitor.
strong
5.0
Solvency
out of 5 stars
weak
Measures the solvency of the company based on several ratios. The
company is more solvent than 90% of the companies we analyze.
strong
3.0
Income
out of 5 stars
weak
Measures dividend yield and payouts to shareholders. The company's
dividend is higher than 50% of the companies we track.
strong
THESTREET RATINGS RESEARCH METHODOLOGY
TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both
price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to
perform against a general benchmark of the equities market and interest rates. While our model is
quantitative, it utilizes both subjective and objective elements. For instance, subjective elements include
expected equities market returns, future interest rates, implied industry outlook and forecasted company
earnings. Objective elements include volatility of past operating revenues, financial strength, and company
cash flows.
Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown
as compared to potential profit volatility, i.e.how much one is willing to risk in order to earn profits; the level of
acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings
growth; and the financial strength of the underlying company as compared to its stock's valuation as
compared to projected earnings growth; and the financial strength of the underlying company as compared
to its stock's performance. These and many more derived observations are then combined, ranked, weighted,
and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of
selecting stocks.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 1, 2015
PAGE 3
February 1, 2015
NYSE: TJX
TJX COMPANIES INC
Sector: Consumer Goods & Svcs Apparel Retail Source: S&P
Annual Dividend Rate
$0.70
Annual Dividend Yield
1.03%
Consensus EPS Estimates² ($)
IBES consensus estimates are provided by Thomson Financial
0.90
3.13 E
3.54 E
Q4 FY15
2015(E)
2016(E)
Beta
0.62
Market Capitalization
$46.6 Billion
52-Week Range
$51.91-$69.84
Price as of 1/29/2015
$67.61
FINANCIAL ANALYSIS
TJX COMPANIES INC's gross profit margin for the third quarter of its fiscal year 2014 is essentially unchanged
when compared to the same period a year ago. Even though sales increased, the net income has decreased.
TJX COMPANIES INC has weak liquidity. Currently, the Quick Ratio is 0.61 which shows a lack of ability to
cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already
having weak liquidity to begin with. This would indicate deteriorating cash flow.
During the same period, stockholders' equity ("net worth") has increased by 6.06% from the same quarter last
year. Overall, the key liquidity measurements indicate that the company is in a position in which financial
difficulties could develop in the future.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the
next 12-months. To learn more visit www.TheStreetRatings.com.
INCOME STATEMENT
Net Sales ($mil)
EBITDA ($mil)
EBIT ($mil)
Net Income ($mil)
Q3 FY14
7,366.07
1,115.65
969.14
594.96
Q3 FY13
6,981.88
1,030.06
888.74
622.66
Q3 FY14
2,430.85
11,592.05
1,623.82
4,373.81
Q3 FY13
2,262.03
10,669.24
1,274.19
4,123.77
Q3 FY14
31.35%
15.14%
13.16%
2.47
18.54%
49.13%
Q3 FY13
31.35%
14.75%
12.73%
2.56
20.24%
52.37%
Q3 FY14
1.63
0.27
16.17
59.94
Q3 FY13
1.64
0.24
15.14
58.71
Q3 FY14
689
0.18
0.85
6.35
NA
3,820,229
Q3 FY13
711
0.15
0.86
5.80
NA
4,065,349
BALANCE SHEET
Cash & Equiv. ($mil)
Total Assets ($mil)
Total Debt ($mil)
Equity ($mil)
PROFITABILITY
Gross Profit Margin
EBITDA Margin
Operating Margin
Sales Turnover
Return on Assets
Return on Equity
DEBT
Current Ratio
Debt/Capital
Interest Expense
Interest Coverage
SHARE DATA
Shares outstanding (mil)
Div / share
EPS
Book value / share
Institutional Own %
Avg Daily Volume
2 Sum of quarterly figures may not match annual estimates due to
use of median consensus estimates.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 1, 2015
PAGE 4
February 1, 2015
NYSE: TJX
TJX COMPANIES INC
Sector: Consumer Goods & Svcs Apparel Retail Source: S&P
Annual Dividend Rate
$0.70
Annual Dividend Yield
1.03%
Beta
0.62
Market Capitalization
$46.6 Billion
52-Week Range
$51.91-$69.84
Price as of 1/29/2015
$67.61
RATINGS HISTORY
Our rating for TJX COMPANIES INC has not
changed since 4/8/2009. As of 1/29/2015, the stock
was trading at a price of $67.61 which is 3.2% below
its 52-week high of $69.84 and 30.2% above its
52-week low of $51.91.
VALUATION
BUY. The current P/E ratio indicates a discount compared to an average of 27.71 for the Specialty Retail
industry and a premium compared to the S&P 500 average of 19.08. For additional comparison, its
price-to-book ratio of 10.65 indicates a significant premium versus the S&P 500 average of 2.69 and a
significant premium versus the industry average of 8.11. The current price-to-sales ratio is below the S&P 500
average, but above the industry average.
2 Year Chart
Price/Earnings
BUY: $45.25
$70
$60
$50
2013
2014
1
2
3
premium
TJX 22.31
Peers 27.71
• Discount. A lower P/E ratio than its peers can
signify a less expensive stock or lower growth
expectations.
• TJX is trading at a discount to its peers.
Price/Projected Earnings
From
Buy
To
Buy
Price reflects the closing price as of the date listed, if available
5
1
2
3
4
5
RATINGS DEFINITIONS &
DISTRIBUTION OF THESTREET RATINGS
Price/Book
(as of 1/29/2015)
TJX 10.65
Peers 8.11
• Premium. A higher price-to-book ratio makes a
stock less attractive to investors seeking stocks
with lower market values per dollar of equity on the
balance sheet.
• TJX is trading at a significant premium to its peers.
47.87% Buy - We believe that this stock has the
opportunity to appreciate and produce a total return of
more than 10% over the next 12 months.
29.29% Hold - We do not believe this stock offers
conclusive evidence to warrant the purchase or sale of
shares at this time and that its likelihood of positive total
return is roughly in balance with the risk of loss.
22.83% Sell - We believe that this stock is likely to
decline by more than 10% over the next 12 months, with
the risk involved too great to compensate for any
possible returns.
TheStreet Ratings
14 Wall Street, 15th Floor
New York, NY 10005
www.thestreet.com
Research Contact: 212-321-5381
Sales Contact: 866-321-8726
2
3
premium
Price/Sales
1
2
premium
4
5
4
5
Price to Earnings/Growth
4
5
discount
1
2
3
premium
4
5
discount
TJX 3.45
Peers 2.60
• Premium. The PEG ratio is the stock’s P/E divided by
the consensus estimate of long-term earnings
growth. Faster growth can justify higher price
multiples.
• TJX trades at a significant premium to its peers.
Earnings Growth
1
2
3
4
lower
5
higher
TJX 2.36
Peers 2.44
• Average. Elevated earnings growth rates can lead
to capital appreciation and justify higher
price-to-earnings ratios.
• TJX is expected to keep pace with its peers on the
basis of earnings growth.
Sales Growth
discount
TJX 1.63
Peers 1.51
• Average. In the absence of P/E and P/B multiples,
the price-to-sales ratio can display the value
investors are placing on each dollar of sales.
• TJX is trading at a valuation on par with its industry
on this measurement.
3
TJX 16.87
Peers 19.91
• Discount. The P/CF ratio, a stock’s price divided by
the company's cash flow from operations, is useful
for comparing companies with different capital
requirements or financing structures.
• TJX is trading at a discount to its peers.
discount
3
2
premium
discount
TJX 19.10
Peers 22.72
• Average. An average price-to-projected earnings
ratio can signify an industry neutral stock price and
average future growth expectations.
• TJX is trading at a valuation on par with its peers.
1
1
Price/CashFlow
discount
premium
MOST RECENT RATINGS CHANGES
Date
Price
Action
1/29/13
$45.25 No Change
4
1
2
3
lower
4
5
higher
TJX 4.55
Peers 8.22
• Lower. A sales growth rate that trails the industry
implies that a company is losing market share.
• TJX significantly trails its peers on the basis of
sales growth
DISCLAIMER:
The opinions and information contained herein have been obtained or derived from sources believed to be reliable, but
TheStreet Ratings cannot guarantee its accuracy and completeness, and that of the opinions based thereon. Data is provided
via the COMPUSTAT® Xpressfeed product from Standard &Poor's, a division of The McGraw-Hill Companies, Inc., as well as
other third-party data providers.
TheStreet Ratings is a division of TheStreet, Inc., which is a publisher. This research report contains opinions and is provided
for informational purposes only. You should not rely solely upon the research herein for purposes of transacting securities or
other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a
qualified securities professional, before you make any investment. None of the information contained in this report constitutes,
or is intended to constitute a recommendation by TheStreet Ratings of any particular security or trading strategy or a
determination by TheStreet Ratings that any security or trading strategy is suitable for any specific person. To the extent any of
the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the
investment needs of any specific person. Your use of this report is governed by TheStreet, Inc.'s Terms of Use found at
http://www.thestreet.com/static/about/terms-of-use.html.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 1, 2015
PAGE 5