TJX is the IBD Stock Of The Day for Friday. Shares of the discount retailer this week have climbed near a buy point to defy the tariff-driven sell-off.
Citigroup on Thursday upgraded TJX to buy from neutral, writing that now is the "time to shine" for off-price retailers. The analyst note said that President Donald Trump's newly-issued sweeping tariffs will create significant disruption in the market. That should greatly increase the availability of products to off-price retailers at "attractive prices." Meanwhile, a weakening consumer environment means that more customers will likely trade down to off-price channels in search of value.
Citigroup views off-price retailers as defensively-positioned in the near term during the market sell-off. The group is well-positioned for long term growth as rival retailers struggle and close stores, which could become more prevalent if consumer spending weakens further. The analysts added that store closures have benefited the group over the past five years, and the momentum may increase if the current environment accelerates retail store closures.
Citigroup has a $140 price target on TJX stock, about 13% above where shares traded on Friday.
The firm rates Ross Stores a buy for the same reasons.
However, now is not a good time to buy stocks as the S&P 500 has tumbled below its 200-day moving average and the Nasdaq is near a bear market. IBD currently recommends 0% to 20% stock exposure in the current market.
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TJX Stock
TJX stock slipped on Friday, paring it's gain for the week to 4.9%. Shares have rebounded from their mid-March low to recover their 50-day and 200-day lines.
On Thursday and Friday, TJX stock briefly overtook a 127.58 buy point for a 17-week double-bottom base. Shares pulled back below that buy point in Friday afternoon trade.
The stock's relative strength line has soared to 52-week highs in March. TJX has an 88 RS Rating, meaning that it has outperformed 88% of the stocks in the IBD database.
TJX stock has a 21-day ATR of 2.21%. The average true range is a metric available on IBD's MarketSurge charting tool. It gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
In the current, unpredictable market, IBD suggests stocks with ATRs of 3% or below.
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