Will TJX (TJX, $53.22) and Ross Stores (ROST, $97.14) be able to beat headwinds facing retail industry?
2018 was a strong year for major U.S retailers including off-price giants like TJX Companies and Ross Stores whose comparable-store sales grew 6% and 4% respectively during the year.
However, with the retail industry experiencing some strong headwinds over the last months owing to a volatile market and many retailers have already experienced sales slowdowns.
TJX and Ross Stores are scheduled to report their first-quarter results next week and the investors are worrying whether they too succumbed to the headwinds. However, there are good reasons to hope that it may not be the case and the companies have managed to carve out a decent quarter in terms of sales.
One of the primary reasons for the optimism about TJX and Ross’s quarterly results is their consistency. 2018 was the fourth consecutive year when Ross posted a 4% comp sales increase. TJX too averaged 4% comp-sales growth over the period gaining 6% in 2018, 2% in 2017, and 5% in 2016.
Another reason is that both the companies have a conservative approach towards forecasts and in most cases, they exceed those forecasts. So the investors can hope that they will meet their targets even when the market is volatile.
In keeping with this approach, Ross anticipates comp sales rise up to 2% in Q1, earnings per share would come in between $1.05 and $1.11 compared to $1.11 in 2018, and total sales to rise almost 6% to $3.79 billion with EPS of $1.12.
On the other hand, TJX expects a 2% to 3% comp sales gain but EPS may get hurt by 7% owing to higher freight costs, wage increases, and currency headwinds. Total sales are expected to rise 6% to $9.21 billion with an EPS of $0.55.
Furthermore, following the recent tariff raise on $200 billion Chinese imports which may further increase, the retail industry is in for some serious long term threats. But the exact nature of impact is still not clear and while TJX and Ross’s track records may inspire assurance, there’s still no guarantee in investing.
TJX in upward trend: 10-day moving average crossed above 50-day moving average on January 30, 2025
The 10-day moving average for TJX crossed bullishly above the 50-day moving average on January 30, 2025. This indicates that the trend has shifted higher and could be considered a buy signal. In of 20 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on January 16, 2025. You may want to consider a long position or call options on TJX as a result. In of 80 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for TJX just turned positive on January 21, 2025. Looking at past instances where TJX's MACD turned positive, the stock continued to rise in of 48 cases over the following month. The odds of a continued upward trend are .
TJX moved above its 50-day moving average on January 21, 2025 date and that indicates a change from a downward trend to an upward trend.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where TJX advanced for three days, in of 333 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 9 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where TJX declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
TJX broke above its upper Bollinger Band on January 27, 2025. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for TJX entered a downward trend on January 23, 2025. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 76, placing this stock better than average.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding price growth. TJX’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: TJX's P/B Ratio (15.552) is very high in comparison to the industry average of (3.964). P/E Ratio (25.829) is within average values for comparable stocks, (110.742). TJX's Projected Growth (PEG Ratio) (2.591) is slightly higher than the industry average of (1.444). Dividend Yield (0.013) settles around the average of (0.028) among similar stocks. P/S Ratio (2.131) is also within normal values, averaging (1.139).
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General Information
a chain of retail apparels and home fashions stores
Industry ApparelFootwearRetail