TJX Fair Value Estimate
$91.8841.5% overvalued
Blended fair value estimate based on DCF, Graham Number, and earnings-based models.
TJX Companies Inc
Exchange: NYSESector: Consumer CyclicalIndustry: Apparel Retail
The TJX Companies, Inc. (TJX) is the off-price apparel and home fashions retailer in the United States and worldwide. As of January 28, 2012, the Company operated in four business segments. It has two segments in the United States, Marmaxx (T.J. Maxx and Marshalls) and HomeGoods; one in Canada, TJX Canada (Winners, Marshalls and HomeSense) and one in Europe, TJX Europe (T.K. Maxx and HomeSense). As a result of the consolidation of the A.J. Wright chain, all A.J. Wright stores ceased operations by the end of February 2011. It completed the consolidation of A.J. Wright, converting 90 of the A.J. Wright stores to T.J. Maxx, Marshalls or HomeGoods banners and closed the remaining 72 stores, two distribution centers and home office. In December 2012, the Company acquired Sierra Trading Post, an off-price Internet retailer.
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Earnings per share grew at a 9.0% CAGR.
Current Price
$157.03
-0.83%GoodMoat Value
$91.88
41.5% overvaluedProfile
Valuation (TTM)
Market Cap$174.38B
P/E31.74
EV$182.73B
P/B17.11
Shares Out1.11B
P/Sales2.89
Revenue$60.37B
EV/EBITDA21.56
TJX Companies Inc (TJX) Valuation
GoodMoat Analysis
The GoodMoat Target of $80.69 suggests TJX is significantly overvalued, with a negative margin of safety. While the company exhibits strong operational metrics, its current P/E of 34.7x is high relative to its historical context and recent growth, presenting an unfavourable valuation for a value investor.
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Based on the GoodMoat Investment Framework, TJX's current price of $159.74 is nearly double the platform's fair value estimate of $80.69. This results in a negative margin of safety, placing it firmly in the 'Unfavourable' band according to Section 4's DCF analysis thresholds, which require a margin of safety of at least 20% to be considered favourable. The stock's forward P/E of 34.7x appears elevated. While the P/E for the broader apparel retail sector can vary, this multiple is high for a company with 8.5% YoY revenue growth, resulting in a PEG ratio well above 1.0. Historically, TJX has often traded in the low-to-mid 20s P/E range, suggesting the current multiple is at the higher end of its historical spectrum. The valuation disconnect is stark when considering the strong underlying quality indicators, such as an ROE of 61.0% and solid profit margins. For a value investor, this creates a scenario where a high-quality business is trading at a price that demands near-perfect future execution, offering no margin of safety against potential disappointment.
TJX Valuation Metrics
FCF$4.92B
FCF Growth Rate9.56%
EPS Growth (CAGR)9.02%
WACC10.00%
Fair Value Models
Graham Number, PEG-based, and Earnings-based models
View Fair Value →TJX Valuation & Fair Value Analysis
TJX Companies Inc (TJX) valuation analysis using multiple fair value methodologies. GoodMoat calculates a blended fair value target using discounted cash flow (DCF) analysis, the Graham Number, and earnings-based valuation models.
The GoodMoat Fair Value target for TJX Companies Inc is $91.88. The current stock price is $157.03, suggesting the stock is 70.9% overvalued.
The price-to-earnings (P/E) ratio is 31.74. Price-to-book ratio is 17.11. Price-to-sales ratio is 2.89. Enterprise value to EBITDA is 21.56. PEG ratio is 1.12.
GoodMoat's valuation models include the Graham Number (based on EPS and book value), an earnings-based model (discounted future EPS), and a PEG-adjusted valuation. The three models are averaged to produce a blended fair value estimate. Use these tools alongside the DCF calculator and reverse DCF to form a comprehensive view of TJX Companies Inc's intrinsic value.