February 28, 2016
NYSE: TJX
TJX COMPANIES INC
BUY
A+
A
A-
HOLD
B+
B
Annual Dividend Rate
$0.84
B-
C+
C
Annual Dividend Yield
1.11%
SELL
C-
D+
D
Beta
0.56
Sector: Consumer Goods & Svcs
TJX BUSINESS DESCRIPTION
The TJX Companies, Inc. operates as an off-price
apparel and home fashions retailer in the United
States and internationally. It operates through four
segments: Marmaxx, HomeGoods, TJX Canada, and
TJX Europe.
STOCK PERFORMANCE (%)
3 Mo.
Price Change
4.78
Weekly Price: (US$)
D-
E+
E
E-
F
Market Capitalization
$50.3 Billion
Sub-Industry: Apparel Retail
SMA (50)
BUY
52-Week Range
$63.53-$76.93
RATING SINCE
TARGET PRICE
04/08/2009
$87.42
Price as of 2/25/2016
$75.08
Source: S&P
SMA (100)
1 Year
2 Years
90
TARGET
PRICE
$87.42
TARGET
TARGETPRICE
PRICE$87.42
$87.42
TARGET
PRICE
$87.42
85
80
75
70
1 Yr.
8.21
3 Yr (Ann)
19.88
65
60
GROWTH (%)
Last Qtr
7.92
2.81
6.45
Revenues
Net Income
EPS
12 Mo.
6.41
2.82
6.03
3 Yr CAGR
6.14
6.10
9.41
Ind Avg
45.80
240.49
24.31
S&P 500
12.28
14.59
13.97
50
Rating History
BUY
Volume in Millions
RETURN ON EQUITY (%)
TJX
52.88
51.94
50.53
Q4 2015
Q4 2014
Q4 2013
55
50
25
2014
2015
2016
0
COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History
P/E COMPARISON
RECOMMENDATION
We rate TJX COMPANIES INC (TJX) a BUY. This is based on the convergence of positive investment
measures, which should help this stock outperform the majority of stocks that we rate. The company's
strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with
reasonable debt levels by most measures, notable return on equity, good cash flow from operations and solid
stock price performance. We feel its strengths outweigh the fact that the company shows low profit margins.
22.48
27.13
21.53
TJX
Ind Avg
S&P 500
HIGHLIGHTS
TJX's revenue growth has slightly outpaced the industry average of 7.0%. Since the same quarter one year
prior, revenues slightly increased by 7.9%. This growth in revenue appears to have trickled down to the
company's bottom line, improving the earnings per share.
EPS ANALYSIS¹ ($)
The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been
successful management of debt levels.
2013
2014
Q4 0.99
Q3 0.86
Q2 0.80
Q1 0.69
Q4 0.93
Q3 0.85
Q2 0.73
Q1 0.64
Q4 0.81
Q3 0.86
Q2 0.66
Q1 0.62
The return on equity has improved slightly when compared to the same quarter one year prior. This can be
construed as a modest strength in the organization. When compared to other companies in the Specialty
Retail industry and the overall market, TJX COMPANIES INC's return on equity exceeds that of the industry
average and significantly exceeds that of the S&P 500.
2015
NA = not available NM = not meaningful
1 Compustat fiscal year convention is used for all fundamental
data items.
The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting
the earnings growth and other positive factors similar to those we have cited here. 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.
TJX COMPANIES INC has improved earnings per share by 6.5% in the most recent quarter compared to the
same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth
over the past two years. We feel that this trend should continue. During the past fiscal year, TJX COMPANIES
INC increased its bottom line by earning $3.34 versus $3.15 in the prior year. This year, the market expects an
improvement in earnings ($3.48 versus $3.34).
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 28, 2016
PAGE 1
February 28, 2016
NYSE: TJX
TJX COMPANIES INC
Sector: Consumer Goods & Svcs Apparel Retail Source: S&P
Annual Dividend Rate
$0.84
Annual Dividend Yield
1.11%
PEER GROUP ANALYSIS
10%
REVENUE GROWTH AND EBITDA MARGIN*
ROST
AEO
TJX
BURL
Market Capitalization
$50.3 Billion
52-Week Range
$63.53-$76.93
Price as of 2/25/2016
$75.08
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).
V
FA
DSW
Beta
0.56
AB
OR
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.
LE
AB
-12.5%
R
VO
FA
GES
ANF
2%
16%
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 $1.8 Billion and $50.3 Billion.
Companies with NA or NM values do not appear.
*EBITDA – Earnings Before Interest, Taxes, Depreciation and
Amortization.
10%
REVENUE GROWTH AND EARNINGS YIELD
ROST
AEO
V
FA
LB
DSW
PEER GROUP: Specialty Retail
Ticker
TJX
FL
BURL
URBN
AEO
LB
ROST
DSW
ANF
GES
GPS
Recent
Company Name
Price ($)
TJX COMPANIES INC
75.08
FOOT LOCKER INC
67.03
BURLINGTON STORES INC
56.82
URBAN OUTFITTERS INC
26.50
AMERN EAGLE OUTFITTERS INC
14.92
L BRANDS INC
85.67
ROSS STORES INC
56.54
DSW INC
26.69
ABERCROMBIE & FITCH
28.20
GUESS INC
20.92
GAP INC
27.60
Market
Cap ($M)
50,268
9,201
4,316
3,109
2,904
24,796
22,899
2,105
1,895
1,752
11,093
Price/
Earnings
22.48
18.07
29.59
NA
14.49
20.30
23.12
15.34
90.97
20.31
12.43
Net Sales
TTM ($M)
30,944.94
7,316.00
5,077.70
3,445.13
3,487.87
12,154.04
11,721.97
2,588.39
3,525.29
2,137.08
15,797.00
Net Income
TTM ($M)
2,277.66
529.00
146.57
151.61
198.04
1,253.02
1,005.03
155.05
22.22
88.00
920.00
The peer group comparison is based on Major Apparel Retail companies of comparable size.
LE
FL
AB
OR
BURL
TJX
URBN
GPS
UN
ANF
LE
AB
-12.5%
R
VO
FA
Revenue Growth (TTM)
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.
Some of the larger specialty retail companies also profit from the extension of credit to their customers with
branded credit cards.
UN
Revenue Growth (TTM)
LE
FL
1%
GES
9%
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 -10.2% and
9%. 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 28, 2016
PAGE 2
February 28, 2016
NYSE: TJX
TJX COMPANIES INC
Sector: Consumer Goods & Svcs Apparel Retail Source: S&P
Annual Dividend Rate
$0.84
Annual Dividend Yield
1.11%
COMPANY DESCRIPTION
The TJX Companies, Inc. operates as an off-price apparel
and home fashions retailer in the United States and
internationally. It operates through four segments:
Marmaxx, HomeGoods, TJX Canada, and TJX Europe.
The company sells family apparel, including footwear
and accessories; home fashions, such as home basics,
accent furniture, lamps, rugs, wall decor, decorative
accessories, and giftware; and other merchandise. It
operates stores under the T.J. Maxx, Marshalls,
HomeGoods, Winners, HomeSense, T.K. Maxx, and
Sierra Trading Post names, as well as operates
e-commerce sites tjmaxx.com, tkmaxx.com, and
sierratradingpost.com. The company operates
approximately 3,300 stores. The TJX Companies, Inc.
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
0.56
Market Capitalization
$50.3 Billion
52-Week Range
$63.53-$76.93
Price as of 2/25/2016
$75.08
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
4.5
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 80% of the
stocks we rate.
strong
5.0
Total Return
out of 5 stars
weak
Measures the historical price movement of the stock. The stock
performance of this company has beaten 90% 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 28, 2016
PAGE 3
February 28, 2016
NYSE: TJX
TJX COMPANIES INC
Sector: Consumer Goods & Svcs Apparel Retail Source: S&P
Annual Dividend Rate
$0.84
Annual Dividend Yield
1.11%
Consensus EPS Estimates² ($)
IBES consensus estimates are provided by Thomson Financial
Beta
0.56
Market Capitalization
$50.3 Billion
52-Week Range
$63.53-$76.93
Price as of 2/25/2016
$75.08
FINANCIAL ANALYSIS
TJX COMPANIES INC's gross profit margin for the fourth quarter of its fiscal year 2015 is essentially
unchanged when compared to the same period a year ago. The company managed to grow both sales and
net income at a faster pace than the average competitor in its industry this quarter as compared to the same
quarter a year ago.
During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing
by 1.00% from the same quarter last year.
0.71
3.48 E
3.88 E
Q1 FY16
2017(E)
2018(E)
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the
next 12-months. To learn more visit www.TheStreetRatings.com.
INCOME STATEMENT
Net Sales ($mil)
EBITDA ($mil)
EBIT ($mil)
Net Income ($mil)
Q4 FY15
8,962.08
1,239.46
1,076.76
666.47
Q4 FY14
8,303.95
1,189.45
1,038.64
648.23
Q4 FY15
2,447.80
11,499.50
1,624.10
4,307.10
Q4 FY14
2,776.40
11,128.38
1,684.60
4,264.23
Q4 FY15
30.54%
13.83%
12.01%
2.69
19.80%
52.88%
Q4 FY14
30.05%
14.32%
12.51%
2.61
19.90%
51.94%
Q4 FY15
1.54
0.27
NA
NA
Q4 FY14
1.71
0.28
16.16
64.28
Q4 FY15
670
0.21
0.99
6.43
NA
3,469,609
Q4 FY14
685
0.18
0.93
6.23
NA
3,355,090
BALANCE SHEET
Cash & Equiv. ($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 28, 2016
PAGE 4
February 28, 2016
NYSE: TJX
TJX COMPANIES INC
Sector: Consumer Goods & Svcs Apparel Retail Source: S&P
Annual Dividend Rate
$0.84
Annual Dividend Yield
1.11%
RATINGS HISTORY
Our rating for TJX COMPANIES INC has not
changed since 4/8/2009. As of 2/25/2016, the stock
was trading at a price of $75.08 which is 2.4% below
its 52-week high of $76.93 and 18.2% above its
52-week low of $63.53.
2 Year Chart
Beta
0.56
Market Capitalization
$50.3 Billion
BUY: $60.99
Price/Earnings
1
2
3
premium
$60
2014
4
5
TJX 22.48
Peers 27.13
• 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
RATINGS DEFINITIONS &
DISTRIBUTION OF THESTREET RATINGS
3
32.19% 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.
35.29% 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.
32.52% 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.
4
5
Price/Book
1
2
3
premium
4
5
Price/Sales
1
2
premium
3
4
5
Price to Earnings/Growth
4
5
discount
1
2
3
premium
4
5
discount
TJX 2.18
Peers 1.94
• 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 premium to its peers.
Earnings Growth
1
2
3
4
lower
5
higher
TJX 6.03
Peers 16.94
• Lower. Elevated earnings growth rates can lead to
capital appreciation and justify higher
price-to-earnings ratios.
• However, TJX is expected to significantly trail its
peers on the basis of its earnings growth rate.
Sales Growth
discount
TJX 1.62
Peers 1.55
• 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 16.98
Peers 15.49
• Average. 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 valuation on par to its peers.
discount
TJX 11.67
Peers 12.59
• Average. A lower price-to-book ratio makes a stock
more attractive to investors seeking stocks with
lower market values per dollar of equity on the
balance sheet.
• TJX is trading at a valuation on par with its peers.
2
premium
discount
TJX 19.35
Peers 19.03
• Premium. A higher price-to-projected earnings ratio
than its peers can signify a more expensive stock
or higher future growth expectations.
• TJX is trading at a premium to its peers.
(as of 2/25/2016)
Research Contact: 212-321-5381
Sales Contact: 866-321-8726
2
premium
Price reflects the closing price as of the date listed, if available
TheStreet Ratings
14 Wall Street, 15th Floor
New York, NY 10005
www.thestreet.com
1
1
Price/CashFlow
discount
2015
MOST RECENT RATINGS CHANGES
Date
Price
Action
2/25/14
$60.99 No Change
Price as of 2/25/2016
$75.08
VALUATION
BUY. TJX COMPANIES INC's P/E ratio indicates a discount compared to an average of 27.13 for the Specialty
Retail industry and a value on par with the S&P 500 average of 21.53. For additional comparison, its
price-to-book ratio of 11.67 indicates a significant premium versus the S&P 500 average of 2.56 and a discount
versus the industry average of 12.59. The current price-to-sales ratio is similar to the S&P 500 average, but it
is above the industry average, indicating a premium. Upon assessment of these and other key valuation
criteria, TJX COMPANIES INC proves to trade at a discount to investment alternatives within the industry.
$80
$70
52-Week Range
$63.53-$76.93
1
2
3
lower
4
5
higher
TJX 6.41
Peers 5.35
• Higher. A sales growth rate that exceeds the
industry implies that a company is gaining market
share.
• TJX has a sales growth rate that exceeds its peers.
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 28, 2016
PAGE 5