Truist sees strength in off-price leaders TJX and Ross Stores

Investing.com -- Truist analysts have unveiled new coverage ratings for some major off-price retail stocks in notes on Monday, highlighting differing views based on execution, competitive positioning and macro challenges.

Burlington Stores was initiated with a Hold rating and a $305 price target. Truist said the off-price channel “offers a very attractive value prop,” but expressed caution on Burlington’s near- and medium-term outlook.

Analyst Joseph Civello noted that Burlington “over-indexes to lower-income consumers,” which could be a headwind in a cautious post-tax-refund environment. Civello also flagged competition, saying rivals’ greater scale could enable them “to secure more premium inventory & ultimately drive stronger traffic.”

In contrast, Truist started coverage of Ross Stores with a Buy rating and a $270 price target, citing “strong execution on top of industry tailwinds.”

Civello pointed to Ross’s “scaled leadership position” as the second-largest off-pricer in the U.S. and a roughly 60% store expansion opportunity, which he said supports what he views as robust long-term topline growth visibility.

He also noted that “traction on social media will continue to fuel a more rapid expansion of their flywheel.”

The TJX Companies also earned a Buy rating and a $175 price target. Truist said TJX’s “leading scale position” and access to “the best product and convenient locations” attract high-value traffic, creating a competitive flywheel that underpins “highly visible top/bottom line growth in a vertical that we view as one of the most attractive in retail.”

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