The TJX Companies, Inc. (NYSE:TJX) last week reported its latest third-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. TJX Companies reported US$10b in revenue, roughly in line with analyst forecasts, although earnings per share (EPS) of US$0.68 beat expectations, being 2.9% higher than what analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see analysts' latest post-earnings forecasts for next year.
Taking into account the latest results, the latest consensus from TJX Companies's 26 analysts is for revenues of US$43.9b in 2021, which would reflect an okay 7.9% improvement in sales compared to the last 12 months. Earnings per share are expected to grow 10% to US$2.85. In the lead-up to this report, analysts had been modelling revenues of US$43.6b and earnings per share (EPS) of US$2.83 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
With analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 5.0% to US$63.89. It looks as though analysts previously had some doubts over whether the business would live up to their expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values TJX Companies at US$70.00 per share, while the most bearish prices it at US$49.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the TJX Companies's past performance and to peers in the same market. We can infer from the latest estimates that analysts are expecting a continuation of TJX Companies's historical trends, as next year's forecast 7.9% revenue growth is roughly in line with 7.3% annual revenue growth over the past five years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 5.9% next year. So although TJX Companies is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. There was also a nice increase in the price target, with analysts feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for TJX Companies going out to 2024, and you can see them free on our platform here..
It might also be worth considering whether TJX Companies's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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