Intrinsic value of TJX - TJX

Previous Close

$73.74

  Intrinsic Value

$87.67

stock screener

  Rating & Target

hold

+19%

  Value-price divergence*

+14%

Previous close

$73.74

 
Intrinsic value

$87.67

 
Up/down potential

+19%

 
Rating

hold

 
Value-price divergence*

+14%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of TJX stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 48.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  7.24
  6.00
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.31
  5.28
  5.25
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.06
  5.06
  5.05
  5.05
Revenue, $m
  33,184
  35,175
  37,250
  39,415
  41,673
  44,030
  46,491
  49,063
  51,751
  54,561
  57,500
  60,576
  63,795
  67,165
  70,694
  74,390
  78,263
  82,321
  86,574
  91,033
  95,707
  100,609
  105,750
  111,141
  116,797
  122,730
  128,955
  135,486
  142,339
  149,530
  157,077
Variable operating expenses, $m
 
  30,953
  32,778
  34,681
  36,667
  38,740
  40,904
  43,166
  45,530
  48,001
  50,586
  53,271
  56,102
  59,065
  62,169
  65,419
  68,825
  72,394
  76,134
  80,055
  84,166
  88,477
  92,997
  97,739
  102,712
  107,930
  113,404
  119,147
  125,174
  131,498
  138,135
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  29,434
  30,953
  32,778
  34,681
  36,667
  38,740
  40,904
  43,166
  45,530
  48,001
  50,586
  53,271
  56,102
  59,065
  62,169
  65,419
  68,825
  72,394
  76,134
  80,055
  84,166
  88,477
  92,997
  97,739
  102,712
  107,930
  113,404
  119,147
  125,174
  131,498
  138,135
Operating income, $m
  3,750
  4,222
  4,472
  4,733
  5,006
  5,290
  5,587
  5,897
  6,221
  6,560
  6,914
  7,305
  7,693
  8,099
  8,525
  8,971
  9,438
  9,927
  10,440
  10,978
  11,541
  12,133
  12,752
  13,403
  14,085
  14,800
  15,551
  16,338
  17,165
  18,032
  18,942
EBITDA, $m
  4,409
  4,910
  5,199
  5,501
  5,817
  6,145
  6,489
  6,848
  7,223
  7,615
  8,026
  8,455
  8,904
  9,375
  9,867
  10,383
  10,924
  11,490
  12,084
  12,706
  13,358
  14,043
  14,760
  15,513
  16,302
  17,130
  17,999
  18,911
  19,867
  20,871
  21,924
Interest expense (income), $m
  73
  87
  105
  124
  143
  164
  185
  208
  231
  255
  281
  308
  336
  365
  395
  427
  461
  496
  533
  572
  612
  655
  699
  746
  795
  846
  900
  957
  1,016
  1,079
  1,144
Earnings before tax, $m
  3,723
  4,136
  4,368
  4,610
  4,862
  5,126
  5,402
  5,689
  5,990
  6,305
  6,634
  6,997
  7,357
  7,735
  8,130
  8,543
  8,977
  9,431
  9,907
  10,406
  10,929
  11,478
  12,053
  12,657
  13,290
  13,954
  14,650
  15,381
  16,148
  16,953
  17,798
Tax expense, $m
  1,425
  1,117
  1,179
  1,245
  1,313
  1,384
  1,458
  1,536
  1,617
  1,702
  1,791
  1,889
  1,987
  2,088
  2,195
  2,307
  2,424
  2,546
  2,675
  2,810
  2,951
  3,099
  3,254
  3,417
  3,588
  3,767
  3,956
  4,153
  4,360
  4,577
  4,806
Net income, $m
  2,298
  3,019
  3,188
  3,365
  3,550
  3,742
  3,943
  4,153
  4,373
  4,602
  4,842
  5,108
  5,371
  5,646
  5,935
  6,237
  6,553
  6,885
  7,232
  7,596
  7,978
  8,379
  8,799
  9,239
  9,701
  10,186
  10,695
  11,228
  11,788
  12,376
  12,993

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  3,473
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  12,884
  9,976
  10,564
  11,178
  11,819
  12,487
  13,185
  13,915
  14,677
  15,474
  16,308
  17,180
  18,093
  19,048
  20,049
  21,098
  22,196
  23,347
  24,553
  25,818
  27,143
  28,534
  29,991
  31,521
  33,124
  34,807
  36,572
  38,425
  40,368
  42,408
  44,548
Adjusted assets (=assets-cash), $m
  9,411
  9,976
  10,564
  11,178
  11,819
  12,487
  13,185
  13,915
  14,677
  15,474
  16,308
  17,180
  18,093
  19,048
  20,049
  21,098
  22,196
  23,347
  24,553
  25,818
  27,143
  28,534
  29,991
  31,521
  33,124
  34,807
  36,572
  38,425
  40,368
  42,408
  44,548
Revenue / Adjusted assets
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
  3.526
Average production assets, $m
  4,335
  4,608
  4,880
  5,163
  5,459
  5,768
  6,090
  6,427
  6,779
  7,147
  7,533
  7,935
  8,357
  8,799
  9,261
  9,745
  10,252
  10,784
  11,341
  11,925
  12,538
  13,180
  13,853
  14,560
  15,300
  16,078
  16,893
  17,749
  18,646
  19,588
  20,577
Working capital, $m
  2,993
  -492
  -522
  -552
  -583
  -616
  -651
  -687
  -725
  -764
  -805
  -848
  -893
  -940
  -990
  -1,041
  -1,096
  -1,152
  -1,212
  -1,274
  -1,340
  -1,409
  -1,480
  -1,556
  -1,635
  -1,718
  -1,805
  -1,897
  -1,993
  -2,093
  -2,199
Total debt, $m
  2,404
  2,910
  3,433
  3,980
  4,550
  5,145
  5,766
  6,415
  7,093
  7,803
  8,545
  9,321
  10,133
  10,984
  11,875
  12,808
  13,785
  14,810
  15,883
  17,009
  18,189
  19,426
  20,723
  22,084
  23,512
  25,009
  26,581
  28,229
  29,959
  31,774
  33,679
Total liabilities, $m
  8,373
  8,879
  9,402
  9,949
  10,519
  11,114
  11,735
  12,384
  13,062
  13,772
  14,514
  15,290
  16,102
  16,953
  17,844
  18,777
  19,754
  20,779
  21,852
  22,978
  24,158
  25,395
  26,692
  28,053
  29,481
  30,978
  32,550
  34,198
  35,928
  37,743
  39,648
Total equity, $m
  4,511
  1,097
  1,162
  1,230
  1,300
  1,374
  1,450
  1,531
  1,614
  1,702
  1,794
  1,890
  1,990
  2,095
  2,205
  2,321
  2,442
  2,568
  2,701
  2,840
  2,986
  3,139
  3,299
  3,467
  3,644
  3,829
  4,023
  4,227
  4,441
  4,665
  4,900
Total liabilities and equity, $m
  12,884
  9,976
  10,564
  11,179
  11,819
  12,488
  13,185
  13,915
  14,676
  15,474
  16,308
  17,180
  18,092
  19,048
  20,049
  21,098
  22,196
  23,347
  24,553
  25,818
  27,144
  28,534
  29,991
  31,520
  33,125
  34,807
  36,573
  38,425
  40,369
  42,408
  44,548
Debt-to-equity ratio
  0.533
  2.650
  2.950
  3.240
  3.500
  3.750
  3.980
  4.190
  4.390
  4.580
  4.760
  4.930
  5.090
  5.240
  5.380
  5.520
  5.650
  5.770
  5.880
  5.990
  6.090
  6.190
  6.280
  6.370
  6.450
  6.530
  6.610
  6.680
  6.750
  6.810
  6.870
Adjusted equity ratio
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,298
  3,019
  3,188
  3,365
  3,550
  3,742
  3,943
  4,153
  4,373
  4,602
  4,842
  5,108
  5,371
  5,646
  5,935
  6,237
  6,553
  6,885
  7,232
  7,596
  7,978
  8,379
  8,799
  9,239
  9,701
  10,186
  10,695
  11,228
  11,788
  12,376
  12,993
Depreciation, amort., depletion, $m
  659
  687
  727
  768
  811
  856
  902
  951
  1,002
  1,055
  1,111
  1,150
  1,211
  1,275
  1,342
  1,412
  1,486
  1,563
  1,644
  1,728
  1,817
  1,910
  2,008
  2,110
  2,217
  2,330
  2,448
  2,572
  2,702
  2,839
  2,982
Funds from operations, $m
  4,133
  3,706
  3,915
  4,133
  4,360
  4,598
  4,845
  5,104
  5,375
  5,658
  5,954
  6,258
  6,582
  6,921
  7,277
  7,649
  8,039
  8,447
  8,876
  9,325
  9,795
  10,289
  10,806
  11,349
  11,919
  12,516
  13,143
  13,801
  14,491
  15,215
  15,975
Change in working capital, $m
  531
  -28
  -29
  -30
  -32
  -33
  -34
  -36
  -38
  -39
  -41
  -43
  -45
  -47
  -49
  -52
  -54
  -57
  -60
  -62
  -65
  -69
  -72
  -75
  -79
  -83
  -87
  -91
  -96
  -101
  -106
Cash from operations, $m
  3,602
  3,734
  3,944
  4,163
  4,392
  4,631
  4,880
  5,140
  5,413
  5,697
  5,995
  6,301
  6,627
  6,969
  7,326
  7,701
  8,093
  8,504
  8,935
  9,387
  9,861
  10,357
  10,878
  11,425
  11,998
  12,599
  13,230
  13,892
  14,587
  15,316
  16,080
Maintenance CAPEX, $m
  0
  -628
  -668
  -707
  -748
  -791
  -836
  -883
  -931
  -983
  -1,036
  -1,092
  -1,150
  -1,211
  -1,275
  -1,342
  -1,412
  -1,486
  -1,563
  -1,644
  -1,728
  -1,817
  -1,910
  -2,008
  -2,110
  -2,217
  -2,330
  -2,448
  -2,572
  -2,702
  -2,839
New CAPEX, $m
  -1,027
  -273
  -272
  -284
  -296
  -309
  -322
  -337
  -352
  -368
  -385
  -403
  -422
  -441
  -462
  -484
  -507
  -532
  -557
  -584
  -612
  -642
  -673
  -706
  -741
  -777
  -815
  -856
  -898
  -942
  -989
Cash from investing activities, $m
  -1,215
  -901
  -940
  -991
  -1,044
  -1,100
  -1,158
  -1,220
  -1,283
  -1,351
  -1,421
  -1,495
  -1,572
  -1,652
  -1,737
  -1,826
  -1,919
  -2,018
  -2,120
  -2,228
  -2,340
  -2,459
  -2,583
  -2,714
  -2,851
  -2,994
  -3,145
  -3,304
  -3,470
  -3,644
  -3,828
Free cash flow, $m
  2,387
  2,833
  3,005
  3,173
  3,348
  3,531
  3,722
  3,921
  4,129
  4,346
  4,574
  4,807
  5,055
  5,316
  5,589
  5,874
  6,173
  6,487
  6,815
  7,159
  7,520
  7,898
  8,295
  8,711
  9,147
  9,605
  10,085
  10,588
  11,117
  11,671
  12,253
Issuance/(repayment) of debt, $m
  993
  506
  524
  546
  570
  595
  621
  649
  678
  709
  742
  776
  812
  851
  891
  933
  978
  1,024
  1,074
  1,125
  1,180
  1,237
  1,298
  1,361
  1,428
  1,498
  1,571
  1,649
  1,730
  1,815
  1,905
Issuance/(repurchase) of shares, $m
  -1,536
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -911
  506
  524
  546
  570
  595
  621
  649
  678
  709
  742
  776
  812
  851
  891
  933
  978
  1,024
  1,074
  1,125
  1,180
  1,237
  1,298
  1,361
  1,428
  1,498
  1,571
  1,649
  1,730
  1,815
  1,905
Total cash flow (excl. dividends), $m
  1,485
  3,339
  3,528
  3,719
  3,918
  4,126
  4,343
  4,570
  4,807
  5,056
  5,316
  5,583
  5,868
  6,167
  6,479
  6,807
  7,151
  7,511
  7,889
  8,285
  8,700
  9,136
  9,592
  10,072
  10,575
  11,102
  11,656
  12,237
  12,846
  13,486
  14,158
Retained Cash Flow (-), $m
  -204
  -59
  -65
  -68
  -70
  -74
  -77
  -80
  -84
  -88
  -92
  -96
  -100
  -105
  -110
  -115
  -121
  -127
  -133
  -139
  -146
  -153
  -160
  -168
  -176
  -185
  -194
  -204
  -214
  -224
  -235
Prev. year cash balance distribution, $m
 
  3,473
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  6,752
  3,464
  3,651
  3,847
  4,052
  4,266
  4,490
  4,724
  4,968
  5,224
  5,487
  5,768
  6,061
  6,369
  6,692
  7,030
  7,384
  7,756
  8,146
  8,554
  8,983
  9,432
  9,904
  10,398
  10,917
  11,462
  12,033
  12,633
  13,262
  13,922
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  6,474
  3,171
  3,178
  3,168
  3,141
  3,096
  3,033
  2,952
  2,854
  2,739
  2,606
  2,461
  2,305
  2,138
  1,965
  1,786
  1,607
  1,428
  1,254
  1,087
  929
  783
  649
  530
  425
  334
  258
  195
  145
  105
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

The TJX Companies, Inc. (TJX) is an off-price apparel and home fashions retailer in the United States and across the world. The Company operates through four segments: Marmaxx, HomeGoods, TJX Canada and TJX International. T.J. Maxx and Marshalls chains in the United States were collectively the off-price retailer in the United States with a total of 2,221 stores, as of January 28, 2017. The HomeGoods chain was an off-price retailer of home fashions in the United States with 579 stores. The TJX Canada segment operates the Winners, HomeSense and Marshalls chains in Canada. Winners is the off-price apparel and home fashions retailer in Canada. HomeSense offers home fashions off-price concept in Canada. The TJX International segment operates the T.K. Maxx and HomeSense chains in Europe. With 503 stores, T.K. Maxx operated in the United Kingdom, Ireland, Germany, Poland, Austria and the Netherlands.

FINANCIAL RATIOS  of  TJX (TJX)

Valuation Ratios
P/E Ratio 20.7
Price to Sales 1.4
Price to Book 10.6
Price to Tangible Book
Price to Cash Flow 13.2
Price to Free Cash Flow 18.5
Growth Rates
Sales Growth Rate 7.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 8.6%
Cap. Spend. - 3 Yr. Gr. Rate 1.6%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 53.3%
Total Debt to Equity 53.3%
Interest Coverage 52
Management Effectiveness
Return On Assets 19.2%
Ret/ On Assets - 3 Yr. Avg. 20.4%
Return On Total Capital 35.6%
Ret/ On T. Cap. - 3 Yr. Avg. 37.5%
Return On Equity 52.1%
Return On Equity - 3 Yr. Avg. 52.5%
Asset Turnover 2.7
Profitability Ratios
Gross Margin 29%
Gross Margin - 3 Yr. Avg. 28.8%
EBITDA Margin 13.4%
EBITDA Margin - 3 Yr. Avg. 14%
Operating Margin 11.3%
Oper. Margin - 3 Yr. Avg. 11.9%
Pre-Tax Margin 11.2%
Pre-Tax Margin - 3 Yr. Avg. 11.7%
Net Profit Margin 6.9%
Net Profit Margin - 3 Yr. Avg. 7.3%
Effective Tax Rate 38.3%
Eff/ Tax Rate - 3 Yr. Avg. 37.9%
Payout Ratio 28.3%

TJX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TJX stock intrinsic value calculation we used $33184 million for the last fiscal year's total revenue generated by TJX. The default revenue input number comes from 2017 income statement of TJX. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our TJX stock valuation model: a) initial revenue growth rate of 6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for TJX is calculated based on our internal credit rating of TJX, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of TJX.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of TJX stock the variable cost ratio is equal to 88%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for TJX stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.6% for TJX.

Corporate tax rate of 27% is the nominal tax rate for TJX. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the TJX stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for TJX are equal to 13.1%.

Life of production assets of 6.9 years is the average useful life of capital assets used in TJX operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for TJX is equal to -1.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $4511 million for TJX - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 650.342 million for TJX is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of TJX at the current share price and the inputted number of shares is $48.0 billion.

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COMPANY NEWS

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▶ Dick's Sporting Goods space might have new tenant(s)   [03:45PM  American City Business Journals]
▶ In Off-Price Retail We Trust?   [01:00PM  Barrons.com]
▶ Key Drivers behind Ross Stores Earnings in Fiscal 2Q17   [Aug-22-17 05:35PM  Market Realist]
▶ HomeGoods Continues to Excel for Off-Price Giant TJX   [Aug-20-17 08:31AM  Motley Fool]
▶ TJX Marshals Support for Possible Move Up   [09:45AM  TheStreet.com]
▶ Cramer: 3 Retailers That Are Standing Their Ground   [Aug-16-17 07:01PM  TheStreet.com]
▶ Company News For August 16, 2017   [10:21AM  Zacks]
▶ Marshalls, TJ Maxx owner to open 260 new stores this year   [07:00AM  American City Business Journals]
▶ TJX tops Street 2Q forecasts   [Aug-15-17 11:23PM  Associated Press]
▶ [$$] Are Retail Sales Dead? Depends Where You Look   [04:31PM  The Wall Street Journal]
▶ Jim Cramer -- Why TJX Is Still a Holding in Our Portfolio   [Aug-14-17 03:03PM  TheStreet.com]
▶ Retail earnings on deck   [02:53PM  CNBC Videos]
▶ Why TJX Companies 2Q Margins Could Decline   [07:37AM  Market Realist]
▶ Behind TJX Companies 2Q Sales Expectations   [Aug-10-17 04:36PM  Market Realist]
▶ 1 Big Thing TJX Bears are Overlooking   [Aug-03-17 10:35AM  Motley Fool]
▶ Burlington Coat Factory: No Safety in Off Price?   [Aug-02-17 02:56PM  Barrons.com]
Financial statements of TJX
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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