The TJX Companies (TJX) is a top American retailer valued at over $135 billion. It operates through several brands like TJ Maxx, Marshals, and Home Goods. It operates almost 5,000 stores in the US and other countries like Canada and Australia.
TJX is a unique type of a retail company because it offers customers a chance to do treasure hunting. As such, customers go there to find new and unique items. It is also a unique company because it is an off-price retailer whose products are typically much cheaper than other companies.
TJX Companies business has done well in the past few years as its annual revenue has jumped from over $32 billion in 2021 to $55 billion in the trailing twelve months. It has also become a highly profitable company with an annual profit of $4.7 billion.
TJX Companies’ stock has jumped by over 450% from its lowest level in 2014, which has transformed it into one of the top American retailers.
The stock was trading at $120 while the HypeIndex metric has grown to 300%.
Positive hype
The company’s positive hype has developed because of its strong stock performance, which has done better than most retailers. It has jumped by over 27% this year.
TJX will benefit as interest rates continue falling, making it affordable for people to go shopping again.
The company published strong financial results, which came out better than expected. Its same store sales growth was 3%, higher than its internal guidance and analysts forecasts.
All its brands had strong growth during the quarter, with most of it coming from its international business, which brought in $1.88 billion in revenues.
It revealed plans to grow its business to Spain, where it will enter in 2026 through its TK Maxx brand. This expansion will help get it to over 5,000 stores in the long term.
TJX has continued to manage its inventories well, with the total figure remaining at $8.4 billion in the last quarter.
The company continued to return cash to shareholders. It paid them $2.9 billion through dividends and share buybacks. It hopes to buy shares worth $2.5 billion through February 1. TJX is one of the top dividend stocks in retail.
Analysts see some more upside for TJX stock in the near term. The average estimate is for the stock to rise to $127, higher than the current $120.
Negative hype
The main concern about TJX Companies is that it stock is significantly overvalued since it has a forward P/E ratio of 28, higher than the sector median of 18.
Retailers are highly cyclical businesses, whose stocks rise and fall over time. As such, buying it here could prove to be a highly expensive scenario.
The stock has formed a bearish divergence pattern, pointing to a retreat.
TJX stock analysis
The weekly chart shows that the TJX share price has been in a strong bullish trend in the past few years. It recently found a strong resistance at $120.47, where it has formed a small double-top pattern. In technical analysis, this is one of the most bearish patterns in the market.
The stock has also formed a bearish divergence pattern, as evidenced by the falling Relative Strength Index (RSI). Therefore, there is a likelihood that the stock will have a bearish reversal in the near term. If this happens, it will drop to the neckline atv $110.
If you’d like to receive more trending stocks straight to your inbox, check out our premium plans. Alternatively, if you’d like to hear more about the services offered by HypeIndex, you can check out our FAQ page.
HypeIndex is an AI platform that detects Hype in stocks and cryptos before it moves the market, providing reliable early detection for profitable investment opportunities.
The algorithm for our proprietary HypeIndex score is based on sentiment analysis, data science and machine learning.
Comentários