TJX Companies operates as an off-price apparel and home fashions retailer in the United States and internationally, selling family apparel, footwear and accessories, home fashions, giftware, and other merchandise. The company was founded in 1956 and is based in Framingham, Massachusetts.
TJX Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Tjx Companies Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Tjx Companies Inc ranked in the 25th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. In terms of the factors that were most noteworthy in this DCF analysis for TJX, they are:
Tjx Companies Inc's weighted average cost of capital (WACC) is 8%; for context, that number is higher than just 18.49% of tickers in our DCF set.
TJX's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than just 18.49% of tickers in our DCF set.
Relative to other stocks in its sector (Consumer Cyclical), Tjx Companies Inc has a reliance on debt greater than merely 23.85% of them.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Cyclical that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as TJX, try AXL, BVH, BXG, FTDR, and LEVI.
TJX Companies (TJX) is still recovering from the disruption of COVID-19. The company's outlook for Q3 still highlights a decline in open-only comp-store sales between a range of minus 10% to 20%. The lackluster sales outlook is mostly driven by the uncertainty in the current environment and the impact on...
Source: Barron's Shelter-in-place policies employed to combat the spread of COVID-19 have led to millions of Americans being stuck at home. Most shopping has taken place online, if at all. That has put off-price retailers like TJX Companies (TJX) and Ross Stores (ROST) at a disadvantage; off-price retailers are known...
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