Story updated at 9:55 a.m. to reflect market activity.
TJX Companies fell -1.2% to $53.38 in morning trading.
The analyst firm also cute its EPS estimates for TJX Companies. For the second quarter the firm expects 72 cents a share, down from 74 cents a share. Analyst Ike Boruchow expects earnings of $3.14 a share in 2014, down from $3.16, and $3.48 a share in 2015, down from $3.58 a share.
"While the off-price model remains stable, channel growth is moderating due to maturation of the industry," Boruchow wrote. "Also, negative traffic trends may bring a need to reinvest margin (from peak levels) back into the business."
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Separately, TheStreet Ratings team rates TJX COMPANIES INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate TJX COMPANIES INC (TJX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TJX's revenue growth has slightly outpaced the industry average of 0.9%. Since the same quarter one year prior, revenues slightly increased by 4.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has significantly increased by 68.74% to $473.75 million when compared to the same quarter last year. In addition, TJX COMPANIES INC has also vastly surpassed the industry average cash flow growth rate of -3.46%.
- TJX COMPANIES INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TJX COMPANIES INC increased its bottom line by earning $2.95 versus $2.55 in the prior year. This year, the market expects an improvement in earnings ($3.16 versus $2.95).
- TJX's debt-to-equity ratio is very low at 0.30 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that TJX's debt-to-equity ratio is low, the quick ratio, which is currently 0.69, displays a potential problem in covering short-term cash needs.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Specialty Retail industry and the overall market, TJX COMPANIES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: TJX Ratings Report