Discount retailer The TJX Companies will report its fourth-quarter results before the market open on February 22, with the consensus calling for earnings of $1.00 on revenue of $9.47 billion. TJX shares have appreciated 1.8% on the year.
TJX was recently trading at $76.83, down $6.81 from its 12-month high and $6.58 above its 12-month low. Overall technical indicators for TJX are neutral with a weak upward trend. The stock has recent support above $74.30, and resistance below $78.50. Of the 16 analysts who cover the stock, 11 rate it a "strong buy", one rates it a "buy", and four rate it a "hold". The stock receives S&P Capital IQ's 4 STARS "Buy" ranking.
The retail sector has been less than impressive in recent months, but discount retailers such as The TJX Companies have fared better than most. TJX has a solid earnings track record, posting better than expected earnings and revenue each of the last eight quarters. Wall Street expects another earnings beat, with the Street setting whisper number of $1.03 per share, versus the consensus $1.00 per share. The stock is in a weak upward trend, with a P/E of 22.5. Analysts expect earnings to rise by a modest 5.7% this year, and an additional 7.7% next year, which should be enough to keep shares moving in the right direction, especially if the company is able to extend its streak of posting better than expected numbers.
Stock Only Trade
If you want a bullish hedged trade on the stock, consider a July 65/70 bull-put credit spread for a 60-cent credit. That's a potential 13.6% return (32.3% annualized*) and the stock would have to fall 8.1% to cause a problem.
If you want to take a bearish stance on the stock at this time, consider a July 85/90 bear-call credit spread for a 50-cent credit. That's a potential 11.1% return (26.3% annualized*) and the stock would have to rise 11.3% to cause a problem.
Covered Call Trade
Originally published on InvestorsObserver.com