Ross Stores and TJX Companies are at the forefront of companies reporting earnings this week, both exhibiting strong earnings momentum. Analysts are optimistic about their performance, with Deutsche Bank reiterating ‘buy’ ratings and setting attractive price targets for both stocks.
These retail giants are expected to benefit from accelerated earnings estimates and robust consumer demand, making their upcoming reports a key event for investors tracking the retail sector’s trajectory.
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This week's earnings season highlights include retail giants Ross Stores and TJX Companies, both demonstrating significant earnings momentum. Despite a relatively light S&P 500 earnings docket with only 14 companies reporting, the retail sector is set to be a major focus. While the artificial intelligence darling Nvidia is the week's main event, the performance of these established retailers will be closely watched.
CNBC Pro, in collaboration with FactSet, identified S&P 500 companies with accelerating earnings momentum. To qualify, stocks needed to meet specific criteria: earnings estimates revised upwards by at least 10% in the past three and six months, and an average analyst price target implying at least 10% upside.
Retailers like TJX Companies and Ross Stores are prime examples of this positive trend. Both companies are scheduled to release their quarterly results this Wednesday and Thursday, respectively. Year-to-date, TJX Companies' shares have seen a slight dip of 4%, while Ross Stores has experienced a robust gain of 18%.
Deutsche Bank has reaffirmed its 'buy' rating on both stocks ahead of their earnings announcements. Analyst Krisztina Katai noted Ross Stores' (ROST) consistent same-store sales momentum, exceeding expectations even after the holiday season and continuing through April, bolstered by strong post-holiday trends and effective merchandising and advertising strategies. Katai has set a price target of $253 for ROST, suggesting approximately 19% upside.
Regarding TJX Companies, Katai believes the company is favorably positioned for its earnings per share (EPS) report, especially given its recent underperformance compared to peers like Ross Stores and Burlington. She highlighted TJX's resilient 'treasure hunt' business model, coupled with an aggressive marketing approach this year, as key drivers for sustained market share gains across various income demographics. A positive update from management could potentially trigger a sector-wide relief rally, with Katai setting a price target of $182, implying a 23% potential increase in TJX shares.
Other notable companies on the list with strong earnings momentum include Keysight Technologies and Nordson Corporation. This week's earnings reports, particularly from the retail sector, are expected to provide significant insights into consumer spending and corporate performance.
