S&P 500 falls on pressure from retail stocks, weak jobless claims
On Friday, UBS analyst Jay Sole increased the price target for Burlington Stores, traded on the New York Stock Exchange under (NYSE:BURL), from $360.00 to $405.00 while reaffirming a Buy rating on the stock. This aligns with the broader analyst consensus, as revealed by InvestingPro data showing a strong buy recommendation (1.38 rating) and analyst targets ranging from $293 to $380. Sole’s update followed a strong quarterly performance by the retailer, which reinforced his positive outlook on the company’s future.
Burlington Stores’ recent success has been attributed to its "Burlington 2.0" strategy, which Sole believes will drive significant growth in the near term (NTM) and beyond. The company has already demonstrated solid performance with 9.25% revenue growth in the last twelve months. UBS forecasts a 19% five-year earnings per share (EPS) compound annual growth rate (CAGR) for Burlington. Additionally, Sole anticipates that earnings beats will act as a catalyst for the stock price to ascend, though InvestingPro’s Fair Value analysis suggests the stock may be currently overvalued.
The UBS analyst’s FY25 EPS estimate for Burlington Stores stands at $10.30, which is 8% higher than the consensus. This optimistic projection is based on the expectation that the company will continue to outperform market expectations.
Sole also expressed confidence in Burlington Stores’ resilience in the face of potential economic challenges, such as tariffs and a possible recession. He argued that the retailer is well-equipped to navigate these scenarios better than the market currently acknowledges. Once this resilience becomes apparent to investors, Sole expects the stock’s price-to-earnings (P/E) ratio to recover to the high 20x range, a level where it consistently traded during the second half of 2024.
In other recent news, Burlington Stores reported fourth-quarter earnings that exceeded expectations, with an adjusted earnings per share (EPS) of $4.07 compared to the forecasted $3.76. The company’s revenue was in line with expectations at $3.28 billion. Burlington also achieved a 6% increase in comparable store sales, surpassing initial guidance. Analysts from BMO Capital Markets, Evercore ISI, and Citi have maintained positive ratings on Burlington, with Evercore ISI raising the price target to $345 and Citi adjusting it to $340. Burlington’s management has projected total sales growth of 6-8% for 2025, with plans to open 100 net new stores. The company ended the fourth quarter with $1.8 billion in liquidity, reflecting a strong financial position. Despite the impressive quarterly performance, Burlington’s management has provided guidance for the future that is below analyst expectations, citing economic uncertainties.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.