Is TJX Stock Still a Buy for Long-Term Growth in 2026?

The TJX Companies, a titan of the off-price retail sector, have delivered a string of strong financial results in 2025, fueling investor optimism about their long-term prospects. With a 30.4% year-to-date stock price surge, the company's valuation has climbed to a price-to-earnings (P/E) ratio of 33x according to Full Ratio, well above the U.S. specialty retail industry average of 17.9x per Yahoo Finance. This premium reflects confidence in TJX's ability to sustain its off-price model amid macroeconomic headwinds. But as the company eyes 2026, investors must weigh its recent outperformance against valuation risks and evolving market dynamics.

The Resilience of the Off-Price Model

TJX's off-price retail strategy-offering name-brand goods at discounted prices-has proven remarkably durable. In Q3 2025, the company reported 5% consolidated comp sales growth, with all divisions contributing, including a 6% rise in Marmaxx and 5% in HomeGoods. This performance underscores the enduring appeal of value-driven shopping, particularly as consumers remain sensitive to inflationary pressures.

Goldman Sachs and UBS have raised their price targets for TJX to $170 and $181, respectively, citing the company's "compelling value proposition" and disciplined inventory management according to Yahoo Finance. The off-price model's strength lies in its ability to balance low prices with margin stability. For instance, TJX's Q3 pretax profit margin hit 12.7%, up 40 basis points year-over-year, driven by cost controls and favorable tariff hedges. Analysts at Citi note that TJX's global expansion-adding 2,000 stores and entering Spain in 2026-further cements its long-term growth potential according to Simply Wall St.

Valuation: A Premium with Caveats

While TJX's 33x P/E ratio according to Full Ratio signals investor enthusiasm, it also raises questions about sustainability. The stock trades at a 28% discount to its 10-year average P/E of 47.38 according to Full Ratio, suggesting some moderation in expectations. However, the forward P/E of 30.97x according to The Globe and Mail still exceeds both industry and peer averages, indicating a stretched valuation.

This premium is justified, in part, by TJX's robust financials. The company ended Q3 with $4.6 billion in cash and cash equivalents, while returning $1.1 billion to shareholders through buybacks and dividends as reported in the Q3 earnings release. Its low payout ratio and strong free cash flow generation provide flexibility to navigate economic uncertainties. Yet, as Wells Fargo analysts caution, "the valuation reflects a high bar for future performance" according to The Globe and Mail. If growth slows or macroeconomic conditions deteriorate, the stock could face downward pressure.

Risks to Long-Term Growth

TJX's success hinges on its ability to manage external risks. Tariffs on U.S. imports, though partially offset by inventory hedges, remain a wildcard. Additionally, rising ocean freight rates-a tailwind in recent quarters-could reverse, squeezing gross margins. Inventory shrinkage, exacerbated by higher store traffic, also poses a threat to profitability.

Geographic expansion introduces further complexity. While entering Spain and adding 2,000 stores globally is a strategic win, it requires significant capital and operational rigor. Retail Dive notes that off-price retailers must "balance scale with local market nuances" to avoid missteps according to Retail Dive.

Conclusion: A Buy with Caution

TJX's off-price model remains a formidable asset, supported by strong sales growth, margin resilience, and a disciplined capital structure. Analysts' upgraded guidance for 2026-projecting 4% comp sales growth and EPS of $4.63–$4.66 according to The Globe and Mail-suggests confidence in the company's ability to navigate challenges. However, the premium valuation demands that management consistently outperform expectations.

For long-term investors, TJX offers a mix of growth and income, with a history of returning capital to shareholders. Yet, the stock is not without risks. Those comfortable with a moderate premium and confident in TJX's execution capabilities may find it a compelling buy. For others, patience until valuation multiples align more closely with historical averages could be prudent.