UPDATE: Citi Upgrades The TJX Companies to Hold

Citi is out with its report today on The TJX Companies TJX, upgrading TJX from Sell to Hold. In a note to clients, Citi writes, "We are taking our Sell rating off of TJX and moving to a Hold. We remain cautious on the off-price sector given above-average returns on capital and operating margins that, in our view, have little room to expand. Yet TJX is on track to build on last year's 2Q profit gain following a subpar 1Q that saw a (115)bp decline in the operating margin. Comps and merchandise margins were both above plan in a June that was broadly promotional across retail – and that suggests the product environment remains favorable. We don't see significant upside to consensus for 2011 but we do see less risk to numbers as compares ease into 3Q and believe a Hold rating is warranted here." Citi raises its PT on TJX from $46 to $56. Shares of TJX closed Thursday at $54.99, up 2.23% from Wednesday's close.