THE TJX COMPANIES, INC. (TJX): what the price requires
At today's price, THE TJX COMPANIES, INC. (TJX) is priced for today's economics sustained for ~5.8 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-13 · Source: https://boothcheck.com/report/TJX
Headline
| Field | Value |
|---|---|
| Ticker | TJX |
| Company | THE TJX COMPANIES, INC. |
| Sector / Industry | Consumer Cyclical |
| Current price | $150.47/sh |
| Composition | Marmaxx 61% / HomeGoods 17% / TJX Canada 9% / TJX International 13% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Must persist for | 5.8y |
| Multiple paid | 38x operating income |
Solve inputs: computed at a 8.2% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2 years.
Reconcile: at the x-ray's 9.3% required return this reads ~7.9 years; the models below use their own rates.
How unusual the bet is: high
| Reference | Value |
|---|---|
| vs own history | +0.93σ |
| cohort percentile (of 210 peers) | 89 |
| sustained it ~5.8 years at this level | 27% |
| implied end-window share | 1% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.17x | 4 | expensive |
| Earnings | 3.02x | 4 | expensive |
| Relative | 1.82x | 5 | expensive |
| Growth | 1.07x | 3 | expensive |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.8%); the inversion above states its own rate.
Per-Model Detail (n=16)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $124.36 | 1.21x | yes | FCF base $5.7B, growth 8% (input: historical growth), terminal g 4.0%, WACC 8.8%, 6yr projection |
| DCF Exit Multiple | Growth | $169.43 | 0.89x | yes | Exit EV/EBITDA: 135.6x / 137.6x / 139.6x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $69.76 | 2.16x | yes | P/E 20x (sector median), scenarios: 16.6x / 20.0x / 23.4x (bear / base = sector held flat / bull), EV/EBITDA 30.8x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $55.89 | 2.69x | yes | BV/sh $9.29, ROE (TTM) 55.7%, ke 9.3% |
| Two-Stage Excess Return | Asset | $177.01 | 0.85x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $141.17 | 1.07x | yes | Rev $61.6B, growth 8% (input: historical growth; tapered), Terminal P/S: 2.3x / 2.7x / 3.2x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $107.75 | 1.40x | yes | EPS $5.14, growth 21% (input: historical EPS growth), PEG=1.39 (Fair) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | $91.25 | 1.65x | yes | BV $9.29 + 5yr PV of (ROE (TTM) 55.7% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $32.78 | 4.59x | yes | √(22.5 × EPS $5.14 × BVPS $9.29) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $8.41 | 17.89x | yes | EBITDA $1.29B × sector EV/EBITDA 14.0x |
| FCF Yield | Earnings | $45.19 | 3.33x | yes | FCF $5477.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $43.04 | 3.50x | yes | SBC-adj FCF $5.25B (FCF $5.48B − SBC $0.22B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $165.85 | 0.91x | yes | EPS $5.14 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $82.48 | 1.82x | yes | Revenue $61.58B × sector P/S 1.5x |
| PEG Fair Value | Relative | $161.63 | 0.93x | yes | EPS $5.14 × (PEG 1.5 × growth 21.0% (input: historical EPS growth)) → PE 31.4x |
| Earnings Yield | Earnings | $55.57 | 2.71x | yes | EPS $5.14 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Share count CAGR (buyback) | -1.5% |
| Burning cash | no |
Operating profit is negative or near zero and the company has no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so years-to-repay cannot be computed honestly.
Operating profit is negative or near zero and there is no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so interest coverage cannot be computed honestly.
Bullet Takeaways
- TJX's edge is a buying machine, not a store format: the 10-K explains that "Our buyers have more visibility into consumer, fashion and market trends and pricing when we buy closer to need, which can help us buy better and reduce our markdown exposure", and that machine just produced 6% comparable sales growth with EPS up 29% in the quarter ended May 2026.
- The biggest risk is what the price already assumes: at $151.27 the market pays about 39 times company-wide operating income, a multiple at the very top of the peer distribution, and only about a quarter of comparable fast-growers have sustained the required pace for the roughly six years the price embeds.
- Watch the second-quarter FY2027 report in August 2026 and the raised full-year bar behind it: management now guides to 3% to 4% comparable sales growth and an 11.9% to 12.0% pretax margin, with higher EPS and buyback targets.
Bull Case
Most retailers' moats are locations or brands. TJX's is a purchasing organization that turns retail's biggest liability, inventory risk, into its advantage. The 10-K describes the mechanic plainly: "Our buyers have more visibility into consumer, fashion and market trends and pricing when we buy closer to need, which can help us buy better and reduce our markdown exposure". Buying close to need means TJX is the natural counterparty whenever the rest of retail misjudges demand, and the returns say the advantage is structural: a 55.7% trailing return on equity, with book value of just $9.29 per share underneath a $151 stock. The business generates its profits on remarkably little invested equity because the model recycles other retailers' mistakes rather than warehousing its own.
The machine spans four segments the filing lays out directly: "our Marmaxx segment operates TJ Maxx, Marshalls, tjmaxx.com and marshalls.com and our HomeGoods segment operates HomeGoods and Homesense. Our TJX Canada segment operates Winners, HomeSense and Marshalls in Canada, and our TJX International segment operates TK Maxx" and related banners abroad. Marmaxx alone did $34.6 billion of net sales in fiscal 2025, up 4%, per the 10-K, and the whole system is currently accelerating rather than maturing: in the quarter ended May 2, 2026, net sales rose 9% to $14.3 billion, comparable sales rose 6%, and pretax margin expanded 1.7 points to 12.0%, driven by expense leverage, favorable fuel hedges, and better merchandise margins. Management raised full-year guidance across the board on the print, to 3% to 4% comp growth and an 11.9% to 12.0% pretax margin.
The financial posture matches the operating story. TJX holds about $2.7 billion of net cash at the corporate level, generates roughly $5.5 billion of free cash flow, and has shrunk its share count about 1.5% a year over the past four years, with the buyback guidance raised again in May. Historical earnings per share have compounded around 21% a year on the engine's input data. The bull must concede the stock is priced at the top of its peer group; the reply is that a company still raising guidance on 6% comps, with a sourcing model competitors have failed to copy for decades, is the specific kind of business that earns its premium year after year.
Bear Case
The balance sheet looks pristine, $2.7 billion of net cash and barely any drawn debt, but that reading stops at the debt line. TJX's real capital structure is its store estate: thousands of leased boxes whose costs are fixed while off-price revenue is, by design, opportunistic. The company's own risk disclosure describes what happens when the footprint has to shrink: "significant costs and obligations of closure, including exposure on leases, owned real estate and other contractual, employment, pension and severance obligations". A fixed-cost lease machine is wonderful operating leverage while comps run at 6%; the same machine runs in reverse if traffic stalls, and the net-cash headline would offer little protection against a lease book that large.
That matters because of what the price requires. At about 39 times company-wide operating income, the market needs TJX's operating growth held near the fastest pace it can self-fund for roughly six years. The near-term pace is within what the company has recently delivered; the stretch is duration, and only about 26% of comparable fast-growers have sustained it that long. The multiple sits at the very top of the peer distribution, and the peer-multiple lens values the business against a 20x sector median P/E. If growth settles back toward ordinary retail rates before the six years run, the premium compresses toward that sector anchor, and the distance between here and there is most of the bear case; the risks below are simply the reasons the duration bet might not pay.
The sourcing engine has two specific pressure points. First, trade policy: the 10-K lists "tariffs, duties, border adjustment taxes, trade" restrictions among its merchandise sourcing risks, and notes that "Changes in currency exchange rates can also increase the cost of inventory purchases that are denominated in a currency other than the local currency of the business buying the merchandise", a live issue for a company running Canadian, UK, European, and Australian banners. Second, supply itself: the filing concedes that "a variety of external factors have impacted, and may continue to impact, execution of our opportunistic buying strategy and inventory management". Off-price inventory is the residue of other retailers' overbuying; a leaner, better-forecasted retail ecosystem thins the closeout pipeline that feeds the model. Note too that part of the first quarter's 1.7-point margin expansion came from favorable fuel hedges, a tailwind that expires rather than compounds.
Valuation
At $151.27 (July 10, 2026), the market pays roughly 39 times TJX's company-wide operating income. Inverted, that price embeds operating growth held at about the ceiling of what the business can self-fund for roughly six years, computed at an 8.3% cost of capital; hold the figures loosely, since each percentage point of growth moves the implied horizon by about two years. The near-term pace asked of the company is one it has recently delivered, so the bet is not on acceleration; it is on persistence. Against history, only about 26% of comparable fast-growers sustained this pace for six years, and the multiple sits at the very top of TJX's peer distribution.
The pattern across valuation methods is one-sided in an instructive way: only the forward-growth family gets near the price, and even its central read sits about 7% below. Asset-based approaches land at less than half the price (the price runs about 2.2 times their central estimate), earnings-power approaches about 3 times, and peer multiples about 1.8 times, anchored on a 20x sector median P/E for a stock earning $5.14 of trailing EPS. That spread is the durability premium: static methods price the business TJX is today, and the market is paying for the compounder it expects TJX to keep being. The growth-adjusted lens splits the difference, reading the stock as fairly priced against its roughly 21% historical EPS growth. Which lens is right depends entirely on whether the growth persists, which is precisely the assumption the six-year duration bet encodes.
Solvency is not part of the debate. Net cash of about $2.7 billion, free cash flow around $5.5 billion, no cash burn, and a share count declining about 1.5% a year mean the downside scenario is not financial stress. It is the multiple: a price at the top of the peer distribution converging toward what the static methods and the sector median already say the demonstrated business supports.
Catalysts
The May 19, 2026 first-quarter report reset the year's expectations upward. Net sales rose 9% to $14.3 billion, comparable sales rose 6%, pretax margin hit 12.0% (up 1.7 points), and diluted EPS of $1.19 came in 29% above the prior year, all described by management as well above plan. On the strength of the quarter the company raised full-year fiscal 2027 guidance on four fronts at once: comparable sales growth to 3% to 4% from 2% to 3%, pretax profit margin to 11.9% to 12.0%, and higher EPS and share buyback targets.
The next information event is the second-quarter fiscal 2027 report expected in August 2026. The specific things to watch are whether the 6% comp pace holds as the company laps stronger compares, and how much of the margin gain repeats, since part of the first quarter's expansion came from favorable fuel hedges and stronger-than-planned expense leverage rather than purely from merchandise margin. Trade policy remains the background variable: tariffs and duties sit on the company's own list of sourcing risks, and any escalation would touch both the cost of goods and, potentially, the supply of the closeout inventory the model feeds on.
The street is constructive: the average analyst price target sits around $181 across 26 analysts, roughly 11% above the current price, with the large majority of covering analysts at buy or strong buy and the stock consolidating in the low $150s after its run. The gap between that consensus and the top-of-peer-group multiple is the standing tension: the street is extrapolating execution the valuation methods say is already paid for.
Peer Cohorts (Per Segment, With Filing Citations)
Marmaxx / HomeGoods +2 more (reported)
- TGT (TARGET CORPORATION)
- (no filing in the citation store)
- HD (HOME DEPOT, INC.)
- (no filing in the citation store)
- LOW (LOWE’S COMPANIES, INC.)
- (no filing in the citation store)
- WMT (WALMART INC.)
- (no filing in the citation store)
- COST (COSTCO WHOLESALE CORP /NEW)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
TJX Q1 FY27 press release · TJX Q1 FY27 press release, May 2026 · TJX Q1 FY27 press release, May 19, 2026 · TJX Q1 FY27 press release, Businesswire · TJX Q1 FY27 press release; Yahoo Finance · MarketBeat and stockanalysis.com, July 2026