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Is Now The Time To Look At Buying The TJX Companies, Inc. (NYSE:TJX)?

Let's talk about the popular The TJX Companies, Inc. (NYSE:TJX). The company's shares received a lot of attention from a substantial price increase on the NYSE over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on TJX Companies’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for TJX Companies

What's The Opportunity In TJX Companies?

According to my valuation model, TJX Companies seems to be fairly priced at around 4.80% above my intrinsic value, which means if you buy TJX Companies today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $74.58, there’s only an insignificant downside when the price falls to its real value. Furthermore, TJX Companies’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will TJX Companies generate?

earnings-and-revenue-growth
earnings-and-revenue-growth

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. TJX Companies' earnings over the next few years are expected to increase by 40%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in TJX’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on TJX, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example, TJX Companies has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

If you are no longer interested in TJX Companies, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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