TD Cowen maintains Burlington stock Buy rating and $335 target

On Tuesday, TD Cowen reaffirmed its positive stance on Burlington Stores (NYSE:BURL), maintaining a Buy rating and a price target of $335.00. Currently trading at $238, the stock has shown significant momentum with a 9.2% gain over the past week. According to InvestingPro data, analyst consensus is strongly bullish, with price targets ranging from $277 to $390, suggesting potential upside. The firm’s analysis suggests that Burlington Stores, along with other "Big Three" Off-Price retailers—Marmaxx and Ross Stores—hold an estimated 3% share of the U.S. beauty and personal care market, which is valued between $3 billion and $4 billion by TD Cowen. With a market capitalization of $14.9 billion and revenue of $10.6 billion in the last twelve months, Burlington has demonstrated solid growth with a 9.3% year-over-year revenue increase. Want deeper insights? InvestingPro offers comprehensive analysis with 7 additional exclusive ProTips for Burlington Stores.

According to the firm, beauty products are a significant category for Off-Price retailers to attract more customer traffic and increase their share of retail sales. Burlington Stores’ emphasis on value is expected to appeal to low and mid-income consumers in 2025. TD Cowen anticipates that Burlington’s strategy will lead to operating leverage from improved same-store sales (SSS), which in turn supports a higher consensus earnings per share (EPS) into fiscal year 2026. The firm projects EPS and Free Cash Flow growth for Burlington to be among the highest in the retail sector.

The strategy outlined by Burlington’s management, known as Burlington 2.0, includes plans for significant expansion and efficiency improvements. InvestingPro’s analysis shows the company maintains a healthy financial position with a current ratio of 1.16 and an Altman Z-Score of 3.05, indicating financial stability. The company’s overall Financial Health Score is rated as FAIR, suggesting a balanced risk-reward profile. This strategy entails adding over 500 new stores, focusing on a smaller store prototype, and closing or relocating 150-200 stores. Additionally, the company aims for mid-single-digit percentage SSS growth, with a baseline of 3%-4%, and approximately 200 basis points of the 400 basis points of margin expansion expected to occur independently of sales.

Key factors contributing to Burlington’s margin expansion include merchandise margin growth from faster inventory turnover and reduced markdowns, with the most substantial gains coming from supply chain productivity improvements. TD Cowen highlights the quality of Burlington’s inventory purchasing, the new store prototype, and enhanced in-store execution as noteworthy elements of the company’s approach.

Burlington Stores has been selected as TD Cowen’s Best Ideas 2025 pick. The price target of $335.00 is based on approximately 28 times the firm’s estimated fiscal year 2026 EPS and 15 times the enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA). The company currently trades at a P/E ratio of 30.4x and maintains a strong gross profit margin of 43.3%. Based on InvestingPro’s Fair Value analysis, the stock appears to be fairly valued at current levels.

In other recent news, Burlington Stores has been the focus of several analyst updates and financial results. The company reported fourth-quarter earnings that exceeded expectations, driven by higher-than-anticipated sales and improved gross margins due to reduced freight and merchandise costs. UBS analyst Jay Sole raised the price target for Burlington Stores to $405, maintaining a Buy rating, following the company’s strong quarterly performance. Meanwhile, Bernstein analysts reiterated an Outperform rating and set a price target of $380, highlighting Burlington’s ongoing multi-year turnaround and potential for significant earnings growth.

Additionally, BMO Capital Markets maintained a positive outlook on Burlington Stores with an Outperform rating and a price target of $293, emphasizing the company’s effective cost management. Evercore ISI analyst Michael Binetti also increased the price target to $345, citing impressive fourth-quarter results and a positive outlook for same-store sales. Burlington’s management acknowledged an uncertain 2025 outlook but expressed confidence in the resilience of its off-price business model. Analysts from UBS and Bernstein project strong earnings growth for Burlington, with UBS forecasting a 19% compound annual growth rate in earnings per share over five years.

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