DowExperts

BUY TJX Companies (TJX) for a move up to $89.50

Long
NYSE:TJX   TJX Companies, Inc. (The)
Dear followers & copiers,

๐Ÿ’ŽWe've just opened a LONG $TJX ( TJX Companies Inc) position using 3.63% of our equity. You can follow our corporate investment portfolio for FREE on eToro. ๐Ÿ“ˆ

What does $TJX actually do? โœ…

The company is based in Framingham, MA, and is a leading off-price retailer of apparel and home fashion goods both in the U.S. as well as globally.
TJX Companies has become a world widely recognized brand and symbol of buying goo-quality fashion products at a fair price. The company has more than 4,300 stores worldwide, which makes TJX a truly global enterprise.

TJX Companies has always focused on introducing a wide range of products across at varying prices in an attempt to appeal to a larger customer audience. Furthermore, The TJX Companies implements very well the rapid turn of inventory strategy for attracting customers, where the company basically creates the sense of urgency and scarcity for its products.

๐Ÿฅ‡One of the most important things not only in an oversaturated sector like Retail, but also in an industry like Fashion retail is to be able to build a strong USP, as that would help you to separate yourself from the pack and stand out in some way. The company has been able to distinguish itself from traditional retailers through the usage of opportunistic buying strategies and the facilitation of a flexible business model.

Furthermore, The TJX Companies has established its operations through the implementation of a generally low-cost structure , which definitely sets it apart from other traditional retailers. For example, in order to maintain control on costs, the company has chosen to promote retail banners, rather than specific brands.

From a distribution network standpoint, $TJX is also designed in a cost effective and efficient manner. One of the ways through which the company has managed to accomplish that is through the development of strong relations with the vendors that $TJX is working with. TJX Companies later uses these strong relationships in order to leverage buying power, negotiate better business parameters and deals.

๐Ÿ’ฏThe TJX Companies operates through four business segments:

In the U.S., it operates through two segments, namely, Marmaxx (through stores under the names of T.J. Maxx and Marshalls) and HomeGoods.

Marmaxx divisions (60.3% of FY21 Sales) sell family apparel (including footwear and accessories), home fashions (including home basics, accent furniture, lamps, rugs, wall deฬcor, decorative accessories and giftware) and other merchandise.

HomeGoods (18.9% of FY21 Sales) chain offers home basics, giftware, accent furniture, lamps, rugs, wall deฬcor and decorative accessories from around the world, seasonal and other merchandise.

In Canada, it operates through TJX Canada (8.8% of FY21 Sales) through stores under the names of Winners, Marshalls and HomeSense and in Europe, it operates through TJX International (12% of FY21 Sales) through stores under the names of T.K. Maxx and HomeSense.

Why we bought the stock? ๐Ÿคฉ

The HomeGoods segment has been seeing robust demand for a while now. In Q2, comp store sales of those stores that have remained open surged 36% YoY. The strong upside should not be a surprise to investors as TJX Companies has experienced solid and continuous sales growth not only in just few categories but rather across its whole product portfolio. The Net Profit from the HomeGoods' segment was also up 42% from fiscal 2020 levels.

Another major positive catalyst for the stock in the future will be the launch of homegoods.com in Q3 of this year. We believe that this is a major step in the right direction for $TJX, which will drastically improve its profitability and increase its customer base. With the secular bull market that we are seeing in the Real Estate sector and the favorable demographic development around Millenials and Gen Z becoming first-time home owners, we expect to see hundreds of millions of people needing a place to buy qualitative home furnishing goods at a relatively low price. TJX Companies will be in a great position to offer just that!

The company has continued to invest heavily in its marketing and advertising campaigns and has further developed attractive, innovative and different loyalty programs, gift giving initiatives, "treasure hunt shopping" and other club benefits.

As a result of the serious increase in online shopping worldwide TJX Companies has undertaken several initiatives to boost its online sales and strengthen its e-commerce business. This shows that the company is willing to evolve together with the always-changing market conditions.

On the Q2 earnings call, the management highlighted that it is seeing impressive sales growth for both the U.S. and U.K. online businesses. The TJX Companiesโ€™ off-price model, together with its strategic store locations, impressive brands and fashion products, are definitely expected to serve as a strong catalyst for both in stores and online performance.

๐Ÿ“ˆ Technical Analysis ๐Ÿ“ˆ

After the most recent 10% correction in the stock price, #TJX is currently sitting at a very strong support zone around the $68-70 range. As you can see on the chart there are few key supports that are currently in play. Firstly, we have the 50-day EMA , which is currently sitting at a around $70, then we also have the upward sloping diagonal support of the uptrend that started at the end of March, 2020, lying at $68. Last but not least we have the 200-day EMA sitting at $66.47 acting as a safety net to the downside. Following the great fundamental story behind the company, the fantastic discount in the stock price, the strong uptrend that the stock has been moving within for over a year and a half now and the multitude of technical supports lying at current levels we are strongly BULLISH on the stock for both the short and mid-term. Our year-end price target for #TJX is $89.50. ๐Ÿš€๐Ÿš€๐Ÿš€



Sincerely,
Dow Experts