UBS maintains buy rating on Burlington Stores stock for strong strategy

On Monday, UBS analysts reiterated their Buy rating and maintained a $390 price target on Burlington Stores (NYSE: NYSE:BURL), representing a significant upside from the current price of $227.37. The analysts expressed optimism due to Burlington’s strategic initiatives and potential market advantages. According to InvestingPro data, the stock is currently trading near its 52-week low of $212.92, while analysts maintain a strong buy consensus with price targets ranging from $267 to $390.

According to UBS, Burlington’s "Burlington 2.0" strategy is proving effective. The strategy is expected to continue providing significant margin benefits, setting Burlington apart from other Softline stocks lacking similar initiatives this year. InvestingPro data shows the company maintains a healthy gross profit margin of 43.36% and has achieved 8.34% revenue growth over the last twelve months.

UBS analysts also highlighted Burlington’s potential to benefit from tariffs. They anticipate a shift in market share towards Off-Price retail, including Burlington, as tariffs impact Department Stores.

Furthermore, UBS believes that tariffs will create inventory challenges across the retail sector. This situation is expected to ultimately benefit Burlington Stores, according to the analysts.

UBS remains confident in Burlington’s ability to navigate the current macroeconomic environment. The analysts view the current stock price as an attractive opportunity for investors.

In other recent news, Burlington Stores has reported a 6% year-over-year sales growth for the first quarter, with comparable store sales meeting the midpoint of their guidance. The company’s gross margin improved by 30 basis points, attributed to merchandise margin expansion and freight benefits. Burlington’s adjusted earnings per share (EPS) for the quarter was $1.67, surpassing both TD Cowen’s estimate of $1.53 and the consensus of $1.43. Despite slightly lower revenue forecasts for the second quarter, Burlington has maintained its full-year guidance. UBS and BMO Capital Markets have both reiterated their positive outlooks, with UBS maintaining a $390 price target and BMO a $277 target, citing Burlington’s strategic management and financial performance. Bernstein has adjusted its price target to $365, noting the retailer’s potential for 25% EPS growth through 2028. Telsey Advisory Group has revised its target to $300, emphasizing Burlington’s strategic acquisition of prime retail locations. Analysts have highlighted Burlington’s ability to navigate macroeconomic challenges while maintaining a focus on long-term growth.

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