Value
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.0 |
| P/S | 8.3 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 4.3 |
| PEG | 3.4 |
| Analyst target | 4.0 |
- ▸Forward P/E: 28.7x
- ▸PEG: 3.53
TJX · Why this verdict
Why TJX Companies, Inc. (The) (TJX) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
TJX Companies delivers a perfect four-quarter earnings beat streak with 61% return on equity and strong institutional momentum, but the stock trades above its analyst target with negative upside asymmetry, making it a hold rather than a new buy at current prices.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
TJX has beaten earnings estimates in all four of the last four quarters with an average positive surprise of 8.7%, while posting return on equity of 61% — placing it among the highest-quality capital allocators in its peer group. Quality breakdown | Return on equity stays above 50% and the beat streak extends to at least 5 consecutive quarters over the next 12 months. | →Stable |
| CounterHigh return on equity is partly driven by leverage with a debt-to-equity ratio of 1.4, and a forward price-to-earnings of 29x leaves limited margin of safety if earnings growth disappoints. | ||
A golden cross formation with the stock above all major moving averages, RSI at 67, and rising on-balance volume confirm a technically sound breakout with broad institutional participation. Momentum breakdown | Stock remains above the 200-day moving average for at least 9 of the next 12 months and on-balance volume continues its upward trend. | →Stable |
| CounterThe stock is only 1.6% from its 52-week high and momentum indicators like RSI at 67 are approaching overbought territory, increasing the risk of near-term consolidation or pullback. | ||
At a forward price-to-earnings ratio of 29.1x and a PEG of 3.58, the stock is priced for perfection, and with the current price 4.5% above the analyst price target, the near-term risk-reward favors holding over buying. Valuation breakdown | Analyst consensus price target rises above $175 within 12 months, restoring at least 4% upside and re-establishing positive asymmetry. | →Stable |
| CounterPremium valuations are sometimes justified for dominant off-price retailers with durable competitive advantages during periods of consumer value-seeking. | ||
A debt-to-equity ratio of 1.4 and free cash flow conversion of only 75% relative to net income introduce earnings quality risk, flagged by the quality scoring model as a warning despite otherwise strong profitability metrics. Bear case | Free cash flow as a percentage of net income rises above 90% and debt-to-equity declines below 1.0 over the next 12 months. | →Stable |
| CounterLeverage at this level is normal for large retailers with predictable cash flows, and the dividend at 115% payout coverage suggests the capital structure is manageable. | ||
TJX has beaten earnings estimates in all four of the last four quarters with an average positive surprise of 8.7%, while posting return on equity of 61% — placing it among the highest-quality capital allocators in its peer group.
→StableQuality breakdown
- Expectation
- Return on equity stays above 50% and the beat streak extends to at least 5 consecutive quarters over the next 12 months.
CounterHigh return on equity is partly driven by leverage with a debt-to-equity ratio of 1.4, and a forward price-to-earnings of 29x leaves limited margin of safety if earnings growth disappoints.
A golden cross formation with the stock above all major moving averages, RSI at 67, and rising on-balance volume confirm a technically sound breakout with broad institutional participation.
→StableMomentum breakdown
- Expectation
- Stock remains above the 200-day moving average for at least 9 of the next 12 months and on-balance volume continues its upward trend.
CounterThe stock is only 1.6% from its 52-week high and momentum indicators like RSI at 67 are approaching overbought territory, increasing the risk of near-term consolidation or pullback.
At a forward price-to-earnings ratio of 29.1x and a PEG of 3.58, the stock is priced for perfection, and with the current price 4.5% above the analyst price target, the near-term risk-reward favors holding over buying.
→StableValuation breakdown
- Expectation
- Analyst consensus price target rises above $175 within 12 months, restoring at least 4% upside and re-establishing positive asymmetry.
CounterPremium valuations are sometimes justified for dominant off-price retailers with durable competitive advantages during periods of consumer value-seeking.
A debt-to-equity ratio of 1.4 and free cash flow conversion of only 75% relative to net income introduce earnings quality risk, flagged by the quality scoring model as a warning despite otherwise strong profitability metrics.
→StableBear case
- Expectation
- Free cash flow as a percentage of net income rises above 90% and debt-to-equity declines below 1.0 over the next 12 months.
CounterLeverage at this level is normal for large retailers with predictable cash flows, and the dividend at 115% payout coverage suggests the capital structure is manageable.
Per-dimension breakdown
Quality
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 9.2 |
| Gross margin | 2.3 |
| Op margin | 4.7 |
| Net margin | 4.7 |
| Current ratio | 4.4 |
| FCF quality | 5.6 |
| Moat | 5.4 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 61%
- ▸Earnings quality warning: 75% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
6.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.8 |
| EPS growth | 7.9 |
Momentum
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 8.9 |
| Price target | 6.5 |
| erm sentiment | 4.9 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $27,714,991 (0.015% of mkt cap)
Peer rank
4.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.8 |
| quality rank | 7.5 |
| growth rank | 4.2 |
- ▸Superior ROE vs peers
Technical
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.3 |
| support resistance | 4.9 |
| 52w position | 9.0 |
| gap | 6.0 |
Risk (lower is worse)
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.2 |
| days to cover | 8.0 |
| volatility | 6.9 |
| put call | 0.0 |
| implied vol | 7.0 |
| max pain risk | 3.0 |
| beta | 9.3 |
| debt equity | 4.3 |
- ▸Elevated put/call: 2.55
- ▸Above max pain $80
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 8.1 |
| dividend safety | 5.2 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 116.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:55d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.3<4.5
- ASYMMETRY:-0.2=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.17
Upside
-0.9%
Downside
5.6%
Sizing output
AVOID
SetupRANGE_BOUND — RSI 56 mid-range, Bollinger mid-band
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.0 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 7.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.3<4.5, ASYMMETRY:-0.2=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.17 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.1, Catalyst at 6.7, and Growth at 6.3; the weakest are Value at 4.0, Momentum at 4.3, and Peer rank at 4.4. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.17 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1TJX has beaten earnings estimates in all four of the last four quarters with an average positive surprise of 8.7%, while posting return on equity of 61% — placing it among the highest-quality capital allocators in its peer group.
Trip ifReturn on equity falls below 40%, more than 34% lower than the current 61%, signaling meaningful deterioration in capital efficiency.
- P2A golden cross formation with the stock above all major moving averages, RSI at 67, and rising on-balance volume confirm a technically sound breakout with broad institutional participation.
Trip ifPrice falls below the 200-day moving average and on-balance volume declines for more than 45 consecutive days.
- P3At a forward price-to-earnings ratio of 29.1x and a PEG of 3.58, the stock is priced for perfection, and with the current price 4.5% above the analyst price target, the near-term risk-reward favors holding over buying.
Trip ifAnalyst consensus price target falls below $155, more than 7% below the current price of $167.33, confirming downside risk has emerged.
- P4A debt-to-equity ratio of 1.4 and free cash flow conversion of only 75% relative to net income introduce earnings quality risk, flagged by the quality scoring model as a warning despite otherwise strong profitability metrics.
Trip ifDebt-to-equity ratio rises above 2.0, exceeding the current 1.4 by more than 40%, increasing financial risk beyond the leverage penalty already applied.