TJX cut at Citi as disappointing Marmaxx comp shows off-price isn’t immune

Investing.com -- Citi downgraded TJX Companies (NYSE: TJX) to Neutral from Buy on Thursday, saying a soft comparable sales figure at its largest division has shifted the risk/reward on a stock priced for perfection.

"The 2Q Marmaxx comp of +1% was weak and disappointing," the bank wrote, adding that while the shortfall may reflect "a temporary fashion misstep rather than anything systemic, this was a stock priced for flawless execution, and this is a reminder that off-pricers are not immune to fashion misses."

Citi acknowledged that TJX’s overall comparable sales growth of 4% came in ahead of plan and that investors own the entire business, not just one banner. But the bank said it cannot overlook that Marmaxx is being outcomped by off-price peers.

It also flagged that several competitors that have historically ceded share to TJX, including Macy’s (NYSE: M), Kohl’s (NYSE: KSS) and Target (NYSE: TGT), have delivered better results in recent quarters.

Citi expects Marmaxx results to improve over the next couple of quarters. Still, with the shares trading at 17.1 times and 15.9 times its fiscal 2026 and 2027 EBITDA estimates, the bank said, "the risk/reward is more balanced as TJX tries to correct its execution issues within a tougher competitive landscape."

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