Goldman Sachs has lowered its view on North American broadline retailers. However, there is a bright spot in this sector. The call was from Stephen Grambling and was after disappointing third-quarter results amidst a solid macroeconomic backdrop. The one obvious winner is going to be TJX Companies Inc. (NYSE: TJX).

Goldman Sachs raised TJX to Buy from Neutral and added the discount retailer to the firm’s prized Conviction Buy List in its retail segment call on Wednesday. TJX’s price target was raised to $77 from $71 in the call, compared to a prior close of $65.24. The consensus price target for TJX at Thomson Reuters is just above $66, which is right in line with the near-$66 share price as of Wednesday, against a 52-week range of $51.91 to $66.47.

Perhaps the biggest loser in the Goldman Sachs retail sector call was none other than J.C. Penney Co. Inc. (NYSE: JCP). The struggling department store owner and operator was downgraded to Sell from an already cautious Neutral rating. Goldman Sachs also put the retailer’s share price target down at $5.50 in the call. Grambling fears that the customer losses are likely to remain in place due to discounting and online shopping pressure. He also fears that store closures and potential strategic alternatives will neither unlock much value nor bring much downside protection for shareholders. That was good for a 3% drop in J.C. Penney shares to $7.15, and the consensus analyst price target is higher at $8.28. What Goldman Sachs fears at J.C. Penney is a more challenging backdrop working against its turnaround.

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TJX replaced Ross Stores Inc. (NASDAQ: ROST) on the Goldman Sachs Conviction Buy List, but the formal Goldman Sachs rating on Ross still remains Buy. The firm’s price target was raised to $99 from $96 in the call.

Burlington Stores Inc. (NYSE: BURL) was downgraded to Neutral from Buy in the same call. Still, the Goldman Sachs price target was raised to $46 from $43. Burlington’s consensus price target was last seen as almost $42.

A broader concern that Goldman Sachs brings up regarding the retail sector is a concern over valuations. The firm noted that valuations are in-line or above average on an absolute and relative basis compared to historical valuations. If the call was so strong for TJX, perhaps it would have been up more than just 0.8% to $65.75 in mid-afternoon trading on Wednesday.

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