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TJX – Markets expectations are for Uniform ROA to rebound to a new high, but management may have concerns about inventory, profitability, and sustainability

January 27, 2022

  • The TJX Companies, Inc. (TJX) currently trades near corporate and above historical averages relative to Uniform earnings, with a 25.0x Uniform P/E (Fwd. V/E’).
  • At these levels, markets are pricing in expectations for Uniform ROA to rebound to a new high of 25% in 2026, accompanied by 3% Uniform asset growth.
  • Meanwhile, analysts expect Uniform ROA to improve to 21% by 2023, accompanied by 3% Uniform asset shrinkage.
  • If sustained going forward, these levels would imply a stock price closer to $45, representing approximately 37% equity downside for the firm.
  • Moreover, the firm’s most recent earnings call suggests management may have concerns about inventory, profitability, and sustainability.

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