President Donald Trump’s latest tariffs are poised to shake up the retail industry, but Citi says TJX Companies is in a prime position to cash in on the chaos. The news Citigroup upgraded TJX — the parent company of Marshalls, Home Goods and T.J. Maxx — to buy from neutral Thursday. The analysts said Trump’s steeper tariffs could shake up the retail market and flood off-price retailers with a wave of quality, discounted inventory. Additionally, with tariffs poised to drive up prices at traditional retailers, Citi analysts believe more shoppers will be bargain-hunting — and that’s exactly where TJX’s chains are known to excel across apparel, home decor and more. “We view off-price as defensively positioned in the near-term, but well-positioned for continued growth in the long-term as other retailers struggle and close stores,” a trend that may continue if consumers spending weakens, the analysts added. The firm raised its price target on TJX stock $140 a share from $128 and also upped its projections for same-store sales and margins. Big picture Trump’s tariff announcement late Wednesday included a base 10% on all imports to the U.S., along with steeper, country-specific duties on dozens of countries set to kick in next week. China will face a 34% tariff — taking its total tariff rate to 54% since Trump returned to the White House in January — while Vietnam, Taiwan and Europe are also seeing steep hikes. The base tariff is slated to go into effect on Saturday while the higher tariffs will be effective on April 9. Retail and apparel stocks are taking a beating Thursday. A popular exchange-traded fund tracking the retail industry is down roughly 7.5%. Target and Nike tumbled around 10%. Shares of Macy’s dropped more than 13%, while Kohl’s cratered around 25%. Walmart is holding up relatively OK, down about 1%. But shares of TJX are bucking the trend, gaining more than 1% Thursday. The move in TJX is a reflection that plenty of investors agree with Citi — and our own long-held view on the company being a deft operator capable of thriving during tough times for other retailers. That was true during the pandemic-era supply chain disruptions and historically high inflation. And now the new tariff challenges play into its strengths once again. Bottom line Citigroup’s upgrade of TJX makes a ton of sense. “TJX is the principal beneficiary” of the tariffs, Jim said Thursday on CNBC. “Everyone is going to take in a lot of inventory because they’re trying to get it in fast, and then they won’t be able to sell everything so then they give it to TJX. That’s what I call a winner.” Jim also argued that investors can’t lump all retailers together in terms of how tariffs will impact them because their business models, supply chains and customer bases differ. Fortunately, that is showing up in the stock performance. In addition to TJX’s outperformance Thursday, fellow portfolio name Costco is bucking the retail slump and sits near the top of the Club’s leaderboard. Jim also identified Costco as a standout retailer despite tariffs, saying its membership model helps cushion the blow from broader challenges in the sector. Costco’s focus on offering great value to shoppers, just like TJX, should appeal even more if prices are going up elsewhere. We’re keeping our buy-equivalent 1 rating on TJX and our price target of $140 a share, though Jim said on the Morning Meeting he could see it going even higher than that. We bought some TJX shares on March 11. For Costco, we also maintain our price target of $1,100 along with our 1 rating. (Jim Cramer’s Charitable Trust is long TJX, COST. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
An exterior view of a T.J. Maxx store in Selinsgrove.
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President Donald Trump’s latest tariffs are poised to shake up the retail industry, but Citi says TJX Companies is in a prime position to cash in on the chaos.