Deutsche Bank favours Ross Stores and TJX for earnings upside into 2027

Deutsche Bank remains bullish on Ross Stores and TJX Companies, identifying the two off-price retailers as its preferred stocks heading into 2027, as their value-focused business models position them to benefit from holiday shopping demand and consumers’ continued focus on affordability.

Analyst Krisztina Katai said sentiment across the off-price retail sector was mixed ahead of third-quarter earnings, reflecting uncertainty over comparable sales recovery at TJX’s Marmaxx division, strong momentum at Ross Stores and weather-related headwinds at Burlington Stores.

Deutsche Bank expects Ross Stores to deliver the strongest comparable-sales performance among the three retailers, raising its estimate for same-store sales growth to 9% from 7%. The bank cited solid underlying trends, although the company faces increasingly difficult comparisons from previous periods.

The outlook is less favourable for TJX and Burlington. Deutsche Bank lowered its Marmaxx same-store sales growth estimate to 1% from 2%, while cutting its Burlington forecast to 2% from 4%, reflecting softer sales trends and weather-related disruptions.

Despite the near-term risks, the bank remains optimistic about the sector’s fourth-quarter prospects. Off-price retailers are expected to benefit from their appeal as holiday shopping destinations, particularly as consumers continue prioritising value amid pressure on household budgets.