Freight-cost pressure prompts Bank of America to trim target prices for off-price retailers, while keeping Buy calls

Bank of America analysts said freight and logistics costs are weighing on near-term expectations for several off-price retailers, prompting reductions to their price targets for TJX Cos., Ross Stores and Burlington, according to a report carried by Yahoo Finance on Oct. 29, 2026.

The adjustment reflects a key sensitivity in the off-price model: these retailers depend on frequent inventory purchases, and shipping and transportation costs can quickly flow through to gross margins and inventory timing. When inbound freight becomes more expensive, analysts typically revisit assumptions for retailer profitability even if demand remains intact.

Despite the lower targets, the analysts kept a bullish stance on the group. The same report said the teams reiterated a “Buy” rating on TJX, Ross and Burlington, suggesting they still expect the companies to generate returns through inventory management, sourcing discipline and the ability to price competitively.

For investors, the action highlights how sell-side desks can distinguish between an earnings outlook and the broader equity thesis. A price target cut generally implies less upside under the analysts’ updated model, but a retained Buy rating indicates they still see the shares as outperforming relative to peers or broader market expectations.

Bank of America did not provide, in the cited report, specific dollar amounts of the target-price reductions, the precise margin or earnings line items affected, or how long management might take to absorb or pass through higher freight costs. Those details matter because the durability of shipping-cost pressure is often the swing factor between temporary headwinds and longer-term margin impairment.

In the broader retail sector, off-price retailers have been viewed as relatively resilient versus full-price peers because they sell discounted merchandise sourced through a mix of supplier relationships and opportunistic buying. Still, their performance can be sensitive to consumer spending patterns, inventory turnover and the cost of getting goods to stores and distribution networks.

If freight costs continue to rise or become more volatile, analysts may continue to revise assumptions for gross margin and near-term operating leverage. Conversely, if shipping rates stabilize, the pressure behind target reductions may fade, leaving “Buy” ratings intact as the market catches up to improved cost expectations.

The next checkpoint for traders and long-term shareholders will be whether upcoming company commentary on input costs and inventory plans supports the analysts’ updated view, and whether broader freight indicators move in the same direction as the assumptions behind the price-target cuts.