Ross Stores Has Fallen Behind TJX. Catching Up Could Unlock Billions.

Ross has been overshadowed by rival TJX. Wall Street sees a way to close the gap. (David Paul Morris/BloombergBloomberg)

Key Points

UBS upgrades Ross Stores to Buy from Neutral and raised its price target to $315 from $239.
Analysts say Ross has lagged behind TJX in store productivity, with the sales-per-square-foot gap widening between 2017 and 2025.
UBS analysts say initiatives under new Ross CEO Jim Conroy could help the retailer catch up.

Ross Stores has fallen behind rival TJX Cos. , but closing that competitive gap could unlock billions of dollars in additional sales for the discount retailer, according to UBS.

UBS analysts upgraded Ross to Buy from Neutral while raising their price target for shares to $315 from $239, implying 37% upside from Friday’s closing price of $229.30.

Analysts argued Ross has lagged substantially behind TJX Cos. in store productivity, a measure of how much revenue a retailer generates per square foot of selling space.

In 2017, Ross generated $407 in annual sales per square foot, compared with $424 for TJX’s Marmaxx division, which includes its T.J. Maxx and Marshalls brands. By 2025, that gap widened to $504 versus $610, respectively, UBS wrote.

Closing half of that gap could generate an additional $2.37 billion in annual revenue for Ross. Eliminating it entirely could unlock $4.75 billion, according to the analysts.

Initiatives under new Ross CEO Jim Conroy, including improved merchandise assortments, increasing marketing investments, and better-in-store operations, could help the retailer catch up with its larger rival, analysts argued. They expect those efforts to sustain stronger sales growth beyond this year, a prospect they believe investors have underestimated.

“We think the market doesn’t appreciate how much ROST closing this gap will drive [same-store sales] growth in FY2027 and beyond,” the analysts wrote.

UBS projected 8.5% in annual revenue growth for Ross over fiscal 2027 and fiscal 2028, versus a consensus forecast about 2.6 percent points lower.

UBS isn’t alone in its optimism.

Wolfe Research initiated coverage of Ross with an Outperform rating and a $279 price target in a note last week. Analysts argued that Ross stands to benefit from an influx of discounted merchandise as traditional retailers struggle with excess inventory.

Shares of Ross rose 2.7% to $235.50 on Monday. The stock is on pace for its best annual performance since 2019 after advancing 31% this year so far, according to Dow Jones Market Data.

TJX shares were flat Monday, but are down 5% so far in 2026. That puts the stock on track for its worst year since 2008.

Ross emerged as a standout among discount retailers after reporting fiscal second-quarter earnings in August. The company posted 10% same-store sales growth, outpacing gains of 4% at TJX and 2% at Burlington Stores .

Write to Ty Roush at tyler.roush@barrons.com

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