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On Friday, Evercore ISI analyst Michael Binetti increased the price target on Burlington Stores (NYSE:BURL) shares to $345 from $335, while continuing to recommend an Outperform rating for the $16.2 billion retailer. According to InvestingPro, analysts maintain a strong buy consensus with price targets ranging from $293 to $380. Binetti highlighted the company’s impressive fourth-quarter performance, which saw same-store sales (SSS) accelerate to a 6% increase compared to a 4% rise in the third quarter, excluding weather impacts. The strong performance contributed to Burlington’s robust 9.25% revenue growth and 43.25% gross profit margin over the last twelve months. Additionally, Burlington’s earnings before interest and taxes (EBIT) margins were reported to be 50 basis points higher than both the company’s guidance and Wall Street’s expectations. InvestingPro data reveals several more key insights about Burlington’s financial health and growth prospects.
Burlington’s guidance for the first quarter indicates relatively stable same-store sales, ranging from a 1% decrease to a 1% increase. This forecast counters the more pessimistic expectations that factors such as the financial constraints of low-income consumers, paused Latin consumer spending, and adverse weather conditions could lead to a significant drop in first-quarter comparable sales.
Binetti suggests that Burlington is on track to meet its first-quarter guidance without needing a significant uptick in the remaining weeks, even with the possibility of tougher comparisons later in the quarter. The company’s outlook appears to allow for potential same-store sales and earnings per share upside, a pattern observed in previous years.
Looking ahead, Burlington’s 2025 guidance implies a potentially stronger underlying algorithm post-first-quarter than what was initially projected during the third-quarter call. While trading at a P/E ratio of 30.39, InvestingPro’s Fair Value analysis suggests the stock may be overvalued at current levels. This anticipation supports the analyst’s reiteration of Burlington Stores as a Top 5 Outperform call, signaling confidence in the retailer’s ongoing performance and growth prospects. For deeper insights into Burlington’s valuation and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Burlington Stores reported a strong performance in the fourth quarter of 2024, with earnings per share (EPS) surpassing expectations at $4.07, compared to the forecasted $3.76. Revenue matched predictions, coming in at $3.28 billion. This robust performance was highlighted by a 6% increase in comparable store sales, exceeding the initial guidance range of 0-2%. Burlington ended the quarter with significant liquidity of $1.8 billion, and plans to open 100 net new stores in 2025, indicating a strategic expansion. Citi analysts adjusted Burlington’s price target to $340 from $344, maintaining a Buy rating, citing strong sales results and improved EBIT margin execution. They emphasized Burlington’s ability to adapt to market conditions and consumer trends, reinforcing confidence in the company’s potential. Despite a slow start to the fourth quarter due to weather, Burlington’s effective inventory management and strategic adjustments were noted as key factors in its success. Burlington’s management expressed optimism about the company’s progress towards long-term financial goals, including plans for further sales growth and margin expansion in 2025.
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