Shares of TJ Maxx (TJX) recovered from an early drop this morning, after Goldman Sachs analyst Adrianne Shapira removed the stock from Goldman’s “Americas Conviction List” (sounds like a TV show about criminals), writing that earnings growth seems to have peaked last quarter and the company’s outperformance versus department stores has slowed.
TJ Maxx shares fell to a session low of $44.14 but are now up 3 cents at $44.85.
Shapira maintained a “Buy” rating on the stock and the same $50 price target. At 13 times Shapira’s estimate for earnings per share for the year ending next January, the stock still has upside, writes Shapira.
Shapira at the same time added JC Penney (JCP) to the Conviction Buy List, writing that while yesterday’s same-store sales results for March were only up 5.4% for JCP, below the average of 12.7% for the group, the company faces easy comparisons with last year. In the second half of 2009, same-store sales suffered significant declines, writes Shapira, setting up the company to beat estimates as profit rises in the second half of this year. Penney is to hold an analyst day on April 20, and that could be a catalyst.
Shapira maintains $37 price target on Penney. JCP stock closed down 54 cents, or 1.7%, at $31.52.
Previously: Another Triumphant Day for Retail; LTD in Focus, April 9, 2010
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