The first market response to a very impressive quarter report by TJ Maxx stores' parent company was a pre-market decline of nearly 3.75%, on the day of the release (November 15). Yet, a negative sentiment could be associated with an overbought positioning by the crowd in TJX, if we consider a more than 50% rally of the stock during the previous 16 months. Company's shares were almost at all-time highs before its latest Q3 report, so the usual logical principles of the trading community like "bought expectation, sold facts" were probably in action.
So, more buying dips at any price above $83-85 per share may follow, given that TJX also lifted its next year forecast, after posting a Q3 revenue of $13.27 billion compared with consensus of $13.09 billion and EPS (equity per share) of $1.03, which was $0.04 better than the analyst estimate of $0.99. TJX sees its full-year 2024 EPS in a higher range of $3.61 to $3.64, compared to its own former forecast of $3.56 to $3.62. TJX management also expects comparable store sales to be up by 4% to 5% in 2024, from earlier forecasts of 3% to 4%. A set of 12 positive EPS guidance revisions and only five negative revisions in the last 90 days.
"Customer traffic was up across all divisions," the company's CEO Ernie Herrman noted, adding that the current quarter is also "off to a strong start". TJX is one of the largest discount store operators in the U.S., which may benefit more from family big savings, as its stores are reportedly off pricing on a wide assortment of various goods in the range of 20% to 60%, and a holiday shopping season is still ahead. Economy stores like TJX and Walmart could be positioned better than rivals even if the sales season could give only a slower rise under usual price policy.
