TJX Stock Price Stumble Is Your Chance to Pick Up a Bargain

Key Points

• TJX Companies had a solid quarter and produced ample cash flow to sustain the capital return outlook. 
• Dividends and share buybacks annualize to 2.5% in 2025; buybacks reduce the count significantly each year.
• Analyst trends support the stock uptrend and point to new highs in late Q2.

TJX Companies NYSE: TJX stock price stumbled in the wake of its Q1 earnings report and guidance update, but investors should not fret. The move is a natural market movement within an otherwise bullish trend caused by tepidness in the result report.

The results were better than expected, with organic and store count growth in the equation, but guidance left something to be desired. What that was is strength. 

The company is guiding for 2% to 3% top-line growth, which is good enough to sustain the capital return outlook, but it was expected. Before the release, the market moved to a new high and needed hot guidance to hold the gain. 

TJX Companies Is Trending Higher in 2025

Investors should take away that as-expected guidance aligns with the uptrend. The uptrend is supported by sustained revenue growth, the cash flow it generates, and the company’s capital allocations, which include dividends, distribution growth, and share buybacks.

Share buybacks are central to the investing thesis. They reduce the count significantly each year and are on track to hit $2.5 billion in 2025. At the end of Q1, the pace of buybacks reduced the count by 1.2% year over year and is expected to remain steady as the year progresses, providing a tailwind for stock price action and leverage for investors.

The analysts’ response to the results and guidance update aligns with an uptrending stock price. Although MarketBeat tracks a few price target reductions, more analysts lifted their price targets, which is leading to the high end of the range. 

That forecasts roughly 25% upside from the critical support target, which is the 30-day moving average. Other pertinent details from the analysts’ data are that coverage is increasing, and the sentiment is firming, with the Moderate Buy rating leaning hard toward a firm Buy. 

TJX Companies Is Well-Positioned for Business in 2025

TJX Companies had a solid quarter with revenue growing by 5%, outpacing the consensus estimate, and margins firm. The growth was underpinned by a 3% systemwide comp driven entirely by transactions. Segmentally, the core Marmaxx group grew by 2% organically and 4% reported, with stronger performance in HomeGoods, TJX Canada, and TJX International.

The only weak spot was comp sales in TJX Canada, which were potentially impacted by the backlash at Trump’s attitude toward Canada. 

Margin news is also good. The company experienced margin pressure, but not as badly as feared. The net result is that GAAP earnings contracted by a penny compared to last year, but a penny’s worth of outperformance offsets the weakness. The critical detail is that the cash flow is sufficient to sustain the capital return outlook and the robust balance sheet health. 

TJX Companies is a retailer with a fortress balance sheet. The balance sheet reflects share repurchases and increased inventory, but remains net cash with low leverage.

Long-term debt is 3x earnings and expected to remain stable. Other critical details include the 13% YOY increase in equity and the company’s position for the summer season.

Management continues to view the merchandise market as favorable, has leaned into acquiring quality products, and is prepared to channel fresh inventory to stores over the summer. 

Institutions Provide Solid Support in 2025

The institutional activity suggests the post-release downturn in TJX price action will not last long. The institutions, which own about 90% of the stock, have been buying on balance in 2025.

Their activity hit multi-year highs in Q1 and remains strong in Q2, providing solid support for this market. The risk is that the TJX stock price will enter a trading range and could linger within it until macroeconomic conditions stabilize.