U.S. Markets closed

What Are Analysts Saying About The TJX Companies, Inc.'s (NYSE:TJX) Long Term Outlook?

Simply Wall St

The latest earnings update The TJX Companies, Inc. (NYSE:TJX) released in February 2019 signalled that the business experienced a robust tailwind, leading to a double-digit earnings growth of 17%. Below is a brief commentary on my key takeaways on how market analysts predict TJX Companies's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

Check out our latest analysis for TJX Companies

Analysts' outlook for the coming year seems rather muted, with earnings expanding by a single digit 3.9%. The growth outlook in the following year seems much more positive with rates reaching double digit 11% compared to today’s earnings, and finally hitting US$3.6b by 2022.

NYSE:TJX Past and Future Earnings, April 19th 2019

While it’s informative knowing the growth each year relative to today’s level, it may be more beneficial gauging the rate at which the business is rising or falling on average every year. The pro of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of TJX Companies's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I've inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 6.0%. This means that, we can presume TJX Companies will grow its earnings by 6.0% every year for the next couple of years.

Next Steps:

For TJX Companies, I've compiled three fundamental aspects you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is TJX worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether TJX is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of TJX? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.