Jim Cramer says TJX stock is an 'anomaly' right now — and a bargain

CNBC

6 days ago

CNBC's Jim Cramer says shares of off-price retailer TJX are a bargain after unfairly taking a beating over the past couple weeks. "The stock got hit off one of the best quarters, and that's just not right," Jim said Monday on "Squawk on the Street." "What we're looking for is trying to find which stocks are anomalies. This one is the anomaly." TJX, the parent company of T.J. Maxx, Marshalls, and HomeGoods, beat expectations on both revenue and earnings in its first quarter of fiscal 2026. Management also reiterated its full-year guidance. Yet shares have dropped about 6% since the day before its May 21 report. Cramer has pointed out many times that this kind of post-earnings dip isn't new for TJX. Management tends to under promise with cautious guidance that underwhelms investors. But then it typically exceeds expectations when results come in. As we noted in our TJX earnings analysis at the time, the sell-off presented a buying opportunity — and still does. "The stock is still too low as far as I am concerned," Jim wrote in this week's Sunday column . TJX stands out in a retail landscape that is "mighty hard to trust" right now, he added, with its ability to cut or maintain prices even as other retailers are forced to raise them. So far this year, TJX stock is up 4.3%, way ahead of the S & P's Retail Select Industry Index , which is down 4.7%, and outperforming the S & P 500's modest 0.5% gain. As of Monday, the stock traded flat near $126 per share, still about 7% below its 52-week high of $135 made on May 20 just before earnings. TJX YTD mountain TJX stock performance YTD. TJX CEO Ernie Herrman made the company's strategy clear on the post-earnings webcast: keep prices low. Herrman stated that TJX aims to maintain a significant gap between their prices versus those at traditional retailers. He emphasized the company's ability to take advantage of the "chaos" in retail by sourcing merchandise more profitably and passing those savings on to customers is its key competitive edge. While Herrman noted "the tariff situation might make things obviously more complicated," he's confident the company can maintain its value proposition. That "chaos" Herrman described is being driven by President Donald Trump's unpredictable tariff policy marked by abrupt changes. That's creating huge uncertainty for major retailers struggling to maintain favorable pricing for consumers. Walmart warned it will have to raise prices on many items because of tariffs. Target will also resort to price increases on certain products to help offset tariff costs. Abercrombie & Fitch , Macy's and Best Buy cut their profit outlooks, while American Eagle , Canada Goose , Ross and Mattel pulled their full-year guidance. TJX is much better positioned. JPMorgan analyst Matthew Boss on Monday raised the firm's price target to $145 from $130, a 15% upside as of Monday's price, while keeping a buy rating. In the note, Boss said he had increased "confidence in continued global market share gains across categories" after meeting with the company's management team. He sees a "trifecta" of drivers in the second half of TJX's 2026 fiscal year and into fiscal 2027, including same-store sales, improving merchandise margin and better earnings flow-through. CEO Herrman's comments that industry inventory is "off the charts" also stood out to Boss. That excess supply gives TJX an advantage to scoop up high-quality goods at a deep discounts and don't have to rely on price hikes to offset tariff costs. In fact, management told Boss that the company's No.1 weapon against the current tariff backdrop is its liquidity and open-to-buy position, meaning the financial flexibility to jump on deals. TJX's scale helps here. It sources from 21,000 vendors in more than 100 countries, fueling a constant stream of merchandise and the kind of treasure hunt experience that drives store traffic and same-store sales. Jim Cramer praised the call, noting the JPMorgan analyst "has timed this push well" after the stock has taken a big hit. Looking ahead, TJX CEO Herrman said the current second quarter is already off to a strong start, focused on value, flexible and opportunistic buying that could set it up for more gains ahead. Investors like us are willing to look past the knee-jerk sell-off and stick with this long-term growth story in an unpredictable retail industry. (Jim Cramer's Charitable Trust is long TJX. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. 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