Financial analyst firm CL King & Associates has downgraded TJX (to neutral from strong buy) as fallout from the security data breach and the company's vague answers continues. "Based on our diminished EPS outlook for FY07, we believe an investment in TJX Cos. is likely to be dead money at this point," said the firm's research advisory.
Much of the firm's concerns are about when the next shoes may drop, especially anything involving the cost of paying for all of these unknowns. "Regarding FY07 expenses related to the data breach, the company stated it is not yet able to reasonably estimate the losses it may incur. Management stated it is unlikely to be able to reasonably estimate such losses at the time earnings are released in FY07," the advisory said. "The ongoing expense issue includes legal costs, exposure to credit and debit card companies and banks, related fees and expenses, and other possible liabilities."