New TJX Price Target After $2.5 Billion Stock Repurchase Announcement

While our shares of Axon (AXON) have regained a lot of lost ground on Wednesday, our shares of off-price retailer TJX Companies (TJX) are down modestly following the company’s consensus-topping January quarter.

That quarter’s upside was fueled by the 5% increase in comp sales versus the 3.7% expected by Wall Street, margin improvement and tighter controls on inventory shrinkage. And we would be remiss if we didn’t point out that 5% comp sales figure, bested Walmart’s U.S. comps sales gain of 4.6% in the same quarter. TJX also announced it will increase its quarterly dividend by 13% to $0.48, plans to accelerate its stock repurchase activity and announced a new stock repurchase program.

Those developments, as well as TJX’s penchant for conservative guidance, are tempering the market’s reaction to TJX’s EPS guidance for the current quarter and the new fiscal year that missed consensus forecasts.

As I just said, the company has a tendency to deliver conservative guidance, especially at the start of the new fiscal year. In reviewing TJX’s guidance for both the current quarter and for the coming year, the two areas that are likely to prove overly cautious are in its comp sales guidance and its pre-tax profit margin guidance. In both periods, TJX sees its comp sale rising 2% to 3%, and we can appreciate that given questions over consumer spending, but we continue to see its lineup benefitting from consumers looking to stretch their spending dollars.

Looking at management’s pre-tax profit margin guidance that calls for about 10.3% in the current quarter, improving to about 11.7% for the current year, that implies some nice improvement as we move through the coming quarters. But that 10.3% figure for the current quarter is flat compared to the April 2025 quarter, while the 11.7% for the current year is below the 12.1% achieved in for the four quarter ended this past January.

Two other factors we need to consider when talking about TJX:

First is the company’s inventory, which stood at $7.3 billion. At the same time, retailer bankruptcies and restructurings are expected to continue with over 1,200 stores expected to close. This should enable TJX to continue to have a fresh supply of product across its different store concepts.

Second, while we tend to talk about footprint expansion when we discuss Costco (COST) and Dutch Bros (BROS) , folks sometimes forget about it when they talk about TJX. During the earnings call, management shared that it sees the long-term potential to grow to 7,000 stores across its existing retail banners current countries and Spain. That suggests roughly a longer-term opportunity to open up to 1,700 locations or, said another way, grow its total store count by more than 30% compared to the 5,214 locations at the end of January. For the coming year, management anticipates opening another 146 locations, roughly 3% growth, and points to a disciplined plan to grow its number of storefronts.

Updating our TJX Price Target

All in all, we would characterize this as another solid quarter by a well-run machine that tends to issue conservative guidance.

Understanding that, we’re lifting our TJX price target to $180 from $165.

Understanding that the current quarter is TJX’s seasonally weakest, we’ll look to use that seasonality to our advantage should any meaningful pullbacks in the shares come about. The same goes for revisiting our current Two rating. With the company expecting to repurchase $2.5 billion to $2.75 billion of stock over the next 11 months, we may need to react quickly if and when such opportunities present themselves.

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At the time of publication, TheStreet Pro Portfolio was long TJX, AXON, COST and BROS.