Discount retailer TJX Companies (TJX) is up 16% over the past 12 months, which is enough for Credit Suisse. The bank downgrades TJX to NEUTRAL, but claims this downgrade is not a “run for the exits call”. The stock is just too expensive:
We believe the market has come to appreciate the defensive nature of the off-price business model and expects strong results to continue. As a result, the stock seems appropriately valued….
At 14.9x and 13.2x our F08E and F09E, TJX now trades at a slight premium to our universe median of 14.2x and 12.5x. We believe this makes multiple expansion less likely and we see little upside to our EPS estimates (which are already above consensus).
Credit Suisse downgrades TJX Companies (TJX) from Outperform to NEUTRAL, target $35.
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