UBS maintains Buy on Burlington Stores, reiterates $390 target

On Friday, UBS reaffirmed its confidence in Burlington Stores (NYSE:BURL), as analyst Jay Sole maintained a Buy rating along with a steady price target of $390.00. Currently trading at $227, the stock sits near its 52-week low of $212.92, despite analysts setting targets between $267 and $390. Sole’s assessment followed Burlington Stores’ recent financial performance and outlook, highlighting the company’s consistency in its adjusted earnings per share (EPS) guidance for fiscal year 2025 (FY25). According to InvestingPro data, 5 analysts have recently revised their earnings expectations downward for the upcoming period.

Burlington Stores has sustained its adjusted FY25 EPS forecast in the range of $8.70 to $9.30, which aligns with the sell-side’s estimate of $9.23. The UBS analyst anticipates that the sell-side might slightly raise its FY25 EPS projections. This expectation is based on two main factors: Burlington Stores’ recent 24-cent EPS beat for the first quarter and its achievement of exceeding the upper end of its initial adjusted FY24 EPS outlook by 11%. The company, with a market capitalization of $14.32 billion, has maintained solid revenue growth of 8.31% over the last twelve months.

Looking ahead to the second quarter, Burlington Stores has provided adjusted EPS guidance ranging from $1.20 to $1.30. This projection falls short of the sell-side’s anticipated $1.35 EPS. Despite this lower guidance for the upcoming quarter, the reiteration of the Buy rating and the price target suggests UBS’s positive outlook on Burlington Stores’ performance potential. InvestingPro analysis indicates the stock is slightly overvalued at current levels, with an overall Financial Health score of FAIR. Get access to 8 additional exclusive ProTips and comprehensive valuation metrics with an InvestingPro subscription.

The company’s strategic positioning and recent financial results seem to contribute to UBS’s optimistic stance. Burlington Stores’ ability to surpass its own financial expectations, as noted by the analyst, could be a sign of underlying strength in the company’s operations and management’s execution capabilities.

Investors and market watchers will likely keep an eye on Burlington Stores as it progresses through the fiscal year, assessing whether the retailer can continue to outperform its guidance and justify the confidence that UBS has expressed with its rating and price target.

In other recent news, Burlington Stores reported first-quarter earnings that exceeded expectations, although sales fell short. Despite this, the company maintained its full-year guidance, aligning with the higher end of Wall Street’s predictions. Analysts from BMO Capital Markets, Bernstein, Telsey Advisory Group, Morgan Stanley (NYSE:MS), and Evercore ISI have all weighed in on Burlington Stores’ performance, with most maintaining an Outperform rating. BMO Capital Markets reiterated a price target of $277, highlighting the company’s strong gross margins and expense management. Meanwhile, Bernstein adjusted its target to $365, citing the retailer’s growth potential despite short-term demand pressures. Telsey Advisory Group reduced its target to $300, noting the impact of increased costs from recently acquired leases. Morgan Stanley slightly lowered its target to $267, expressing optimism about Burlington’s long-term growth prospects. Evercore ISI also adjusted its target to $310, emphasizing Burlington’s proactive cost-saving measures amidst tariff challenges. These developments reflect the complex dynamics Burlington Stores faces in a volatile market environment.

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