The Framingham, Mass.-based company could drive $370 million to $500 million of incremental annual revenue over the next five years from its international operations excluding Canada, with about 250 new stores pushing annual sales growth of about 7% to 8%, analysts Simeon Siegel, Steve McManus and Daniel Stroller said in a note.
The analysts raised their price target on TJX to $60 from $57 previously, while reiterating a buy rating. The shares were up slightly, gaining 0.7% in late morning trading on Tuesday.
"We continue to view TJX as a structural share taker well positioned to capitalize on competitor weakness domestically and abroad," the analysts said.
Corporate expenses have climbed to a "higher, but still light" percentage of sales, and that's been partially tied to international growth, Nomura said.
In the fiscal first quarter ended May 4, TJX said comparable-store sales in the international segment, consisting of Europe and Australia, were up 8% compared with 1% growth a year before. Net sales climbed to $1.23 billion from $1.19 billion previously.
Nomura said it sees opportunity also for international to drive $0.06 to $0.07 of incremental annual earnings per share.
"When weighed against the challenging Euro retail backdrop, where most are flagging pressures, TJX remains one of the few calling out broad-based market share gains and traffic-driven comps, a situation clearly reminiscent of the company's US ascent," the analysts said. "Australia will be worth watching as well."
Price: $ 53.17, Change: $ +0.39, Percent Change: +0.74%
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