Good News: TJX Profiting from Recession

Name brands? At a discount? Who the heck doesn't want that during a recession?

Nobody, apparently -- which would explain the increasing traffic levels at off-price retailer TJX (TJX Quote). Lazard Capital Markets analyst Todd Slater said the company is poised to benefit as consumer spending improves and raised his price target on the stock to $37 from $36.

"We see TJX as a strong offensive play into an improving consumer environment," Slater wrote in a note on Monday.

Slater forecasts traffic in June to be flat, but TJX expects a drop between 3% and 5%.

"Our mall rats observed consistently better than average traffic trends at TJX, accelerating into the Father's Day weekend," he wrote.

TJX has been benefitting from its competitors' hardships. The liquidation of Linens 'N Things and Mervyn's has allowed the retailer to pick up market share. The company will also be boosted by easier profit comparisons, cost cuts and fewer markdowns.

In May, TJX ranked among the best of the best, as same-store sales jumped 5%, beating Wall Street's expectations. The company reaffirmed its second-quarter outlook in the range of 43 cents to 49 cents per share.

Slater maintained his buy rating on the shares.