Analysts at UBS suggest that investors should consider buying TJX Companies Inc. (NYSE: TJX), despite the recent pullback, as the discount retailer will benefit from Trump tariffs.
The investment firm expects TJX will tap into its global network of 21,000 vendors to help navigate higher tariffs in countries like Canada, Mexico, or China.
UBS called TJX “growth stock” and said that it was uniquely positioned to maintain prices at a time where other retailers like Walmart, Best Buy, and even giants such as Best Buy, are warning about weakness.
Analysts added that this will “drive incremental gains in market share” for TJX over the medium and long term.
UBS calls TJX a “high-conviction purchase idea”
UBS believes that the burden of increased taxes will fall on manufacturers and vendors, not TJX.
In its research note the investment firm called TJX stock “high-conviction” buy idea with upside of up to $158. This translates to more than 30% from current levels.
Analysts expect the company to see significant growth in its relatively newer businesses such as Sierra (online activewear retailer), and HomeSense (home furnishings chain).
TJX, a dividend stock currently yielding 1.26% makes it even more exciting to own by 2025.
Jim Cramer and UBS agree on TJX stock
UBS also expects that the international expansion plans of the discount retailer will unlock meaningful upside to its share price in this year.
TJX is committed to achieving 7,000 locations to better compete with its larger competitors.
TJX International accounts for over 12% of TJX’s total revenue, while Canada contributes another 9.0%.
The investment firm believes that TJX’s earnings per share will grow at a rate of 11,5% compounded annually over the next five-year period.
Jim Cramer is another notable name who is bullish on TJX. He said, “I would be a buyer aggressively of TJX if I did not own it,” during his latest update to his Investing Club members.
TJX guiding for some weakness in fiscal 2020
In February, New York-listed firm reported a solid fourth quarter. However, it cited currency headwinds and guided for some weakness in its fiscal year 2026.
Cramer’s followers heard him say last week that TJX is known for underpromising, and then exceeding expectations.
Ernie Herrman is the CEO of TJX Companies. He expects that higher tariffs, a lower consumer confidence and persistent inflation will be a boon to the off-price department stores.
“The silver lining, with consumer confidence down and a rocky climate out there, is that there’s more available out there over the next 6 months… I’m excited for the sales and margin opportunities in this environment,” He told analysts on the quarterly earnings call last month.
The post Trump tariffs can help TJX increase its market share in the US could be modified as new developments unfold
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