Deutsche Bank Forecasts Q4 Beat For TJX Companies And Ross Stores

Deutsche Bank previewed earnings for TJX Companies Inc TJX and Ross Stores, Inc. ROST on Friday and expected both to beat estimates. The firm maintained a Buy rating on both stocks.

Analyst Mike Baker noted that “the off price retailers set their initial annual guidance conservatively, often below consensus, but then beat and raise throughout the year.” As a result, guidance could be below consensus but investors should not be “overly concerned.”

The firm expected TJX’s same-store sales growth to come in at 3.7 percent versus the consensus of 2.4 percent.

For TJX, Baker estimated at currency could adversely impact EPS by 3 percentage points, which would put guidance at $3.29-$3.44 for the current year. Baker, however, thought “$3.50+ is achievable.”

The firm maintained a $68 price target on the stock, set in August of 2014.

TJX Companies reports on Wednesday and closed Monday at $68.40 on, down 0.48 percent.

Baker expected Ross Stores’ same-store sales growth at 3.5 percent, above the consensus of 2.4 percent.

Using Q4 EPS consensus estimates, Baker projected EPS guidance of $4.59-$4.81 for the year. The consensus for 2015 was $4.79 and the Deutsche Bank estimate was $4.98, based on close to a 4 percent comp.

The firm maintained a $95 price target on the stock, set in November of 2014.

Ross Stores reports earnings on Thursday and closed at $98.83, up 0.93 percent.