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Earnings Estimates Rising for TJX (TJX): Will It Gain?

TJX (TJX) shares have started gaining and might continue moving higher in the near term, as indicated by solid earnings estimate revisions.

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This story originally appeared on Zacks

TJX (TJX) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.

- Zacks

Analysts' growing optimism on the earnings prospects of this parent of T.J. Maxx, Marshalls and other stores is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

Consensus earnings estimates for the next quarter and full year have moved considerably higher for TJX, as there has been strong agreement among the covering analysts in raising estimates.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The earnings estimate of $0.82 per share for the current quarter represents a change of +15.49% from the number reported a year ago.

Over the last 30 days, six estimates have moved higher for TJX while one has gone lower. As a result, the Zacks Consensus Estimate has increased 6.49%.

Current-Year Estimate Revisions

For the full year, the earnings estimate of $2.94 per share represents a change of +848.39% from the year-ago number.

The revisions trend for the current year also appears quite promising for TJX, with eight estimates moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 13.7%.

Favorable Zacks Rank

The promising estimate revisions have helped TJX earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

Investors have been betting on TJX because of its solid estimate revisions, as evident from the stock's 11.7% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.



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