A top Wall Street analyst’s stellar endorsement of TJX Companies makes us want to buy more shares of the discount retailer. Matt Boss of JPMorgan — Jim Cramer’s favorite retail analyst — said Friday that several off-price retailers, including Ross Stores , Burlington Stores , and Club holding TJX, were buys. Boss cited favorable momentum in the current quarter for those companies as value-focused consumers grow increasingly cautious in their spending habits. Shares of TJX — the company behind T.J. Maxx, Marshalls, and HomeGoods — have gained roughly 6% year to date but still lagged the S & P 500 ‘s 11% gain over the same stretch. TJX has been trying to get back to its March record-high close of $101.42 and February’s intraday all-time high after taking a detour during a terrible April, which also proved challenging for the overall market. “The stock has been in a total holding pattern,” Jim said while talking about the JPMorgan note Friday morning on CNBC’s “Squawk on the Street.” Boss highlighted a recent JPMorgan cost of living survey that showed 60% of consumers said they no longer have adequate savings to support their current standard of living. Almost half of respondents expect to spend less in discretionary categories over the next 12 months. This backdrop translates into a favorable setup for TJX. One possible catalyst for TJX stock is the company’s quarterly earnings report this coming Wednesday before the opening bell. For TJX’s fiscal 2025 first quarter, ending in April, Boss sees earnings coming in at 86 cents per share, on the high end of management’s guidance range, based on a 2.7% increase in same-store sales, also on the higher end of the company’s guide. The LSEG consensus estimate for TJX earnings is 87 cents, slightly higher than Boss. The JPMorgan analyst has an overweight rating on TJX shares and a price target of $114. The Club has a 1 rating on TJX, also a buy-equivalent, and a price target of $110. We do not tend to trade TJX shares ahead of earnings since the company typically skews conservative when delivering forward guidance, which could push the stock down. However, TJX is the big winner with a management team that executes well — so we wouldn’t be concerned if the stock were to falter following next week’s numbers. Part of the reason is also the growing appeal in off-price retailers and discounters as consumers in higher and higher income brackets seek value. Case in point, Walmart delivered solid fiscal 2025 first-quarter earnings on Thursday with strong revenue growth and operating income driven by consistent spending across income cohorts. In particular, Walmart had share gains from higher-income households as consumers sought out lower prices for everyday purchases. Walmart expects to deliver on the higher end or slightly above its guidance for its fiscal 2025 full year. Jim believes Walmart’s results are a positive read-through to Costco , which always strives to offer the lowest prices to its members. “I continue to think that Costco is the stock to buy off of Walmart,” Jim said Thursday. He went on to call Costco a “winner” for its ability to cater to wealthier shoppers who become more frugal consumers by buying merchandise in volume, giving it the ability to negotiate for lower prices with merchants to offer the best value to its members. While Walmart is more analogous to Costco, TJX and its rivals know how to deliver bargains, too. And, a wealthier clientele looking for deals can only help the off-price retailers as well. (Jim Cramer’s Charitable Trust is long TJX, COST. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
An outdoor mall TJMaxx in Port St Lucie, Florida.
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A top Wall Street analyst’s stellar endorsement of TJX Companies makes us want to buy more shares of the discount retailer.