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On Friday, Telsey Advisory Group adjusted its price target for Burlington Stores (NYSE:BURL) to $300 from the previous $340, while reaffirming an Outperform rating on the stock. The decision came after Burlington Stores reported earnings that, despite falling slightly short of consensus revenue expectations, hit the midpoint of their guidance range. The company’s gross margin of 43.36% exceeded forecasts, and the quarter benefited from a favorable shift in the timing of expenses. According to InvestingPro data, five analysts have recently revised their earnings estimates downward for the upcoming period, suggesting some caution in near-term expectations.
For the second quarter, Burlington’s guidance was somewhat below the consensus, partly due to the timing shift of expenses. However, for the full fiscal year, the company has maintained its revenue and underlying earnings per share (EPS) outlook, excluding the increased costs from bankruptcy-acquired lease expenses. These costs have risen to approximately $0.39 per share for the year, up from the previously estimated $0.15, following the acquisition of 46 leases from Joann’s. With a market capitalization of $14.35 billion and revenue growth of 8.31% over the last twelve months, Burlington continues to show expansion momentum despite current headwinds. For deeper insights into Burlington’s financial health and growth prospects, InvestingPro subscribers can access comprehensive analysis and additional metrics.
The Telsey analyst views the acquisition of prime retail locations as a key part of Burlington’s strategy to expand its presence and attract high-value customers, especially at a time when consumers are broadly seeking value. Burlington’s first-quarter performance and other profit and loss (P&L) efficiencies are expected to counterbalance the impact of current tariff pressures throughout the year.
Burlington Stores is seen as well-positioned in the current economic environment, with the strength of its off-price business model potentially benefiting from consumer trade-downs. The company’s agility in responding to changing market trends and external pressures, along with the expansion of its store fleet and strategic relocations, are anticipated to provide additional growth opportunities compared to its peers.
The revised price target of $300 is based on a multiple of 27.1 times Telsey’s two-year forward EPS estimate of $11.06 for Burlington Stores, which is roughly in line with the three-year next twelve months (NTM) median multiple.
In other recent news, Burlington Stores reported a strong financial performance in the first quarter of 2025, with adjusted earnings per share (EPS) reaching $1.67, surpassing the forecast of $1.43. Despite a slight revenue miss at $2.5 billion compared to the expected $2.52 billion, the company’s strategic initiatives have bolstered investor confidence. Burlington continues its expansion by opening seven new stores and acquiring 46 leases from Jo-Ann Fabrics. Analysts from Morgan Stanley (NYSE:MS), Evercore ISI, and JPMorgan have adjusted their price targets for Burlington Stores, reflecting varied expectations. Morgan Stanley reduced its target to $267 while maintaining an Overweight rating, citing potential for long-term growth. Evercore ISI lowered its target to $310, affirming an Outperform rating, and noted concerns over comparable sales. JPMorgan cut its target to $280, also retaining an Overweight rating, highlighting the company’s improved operating margin. These developments indicate a cautious yet optimistic outlook from analysts regarding Burlington Stores’ future performance.
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