On Tuesday, Citi analysts, led by Paul Lejuez, reaffirmed their Buy rating on Burlington Stores (NYSE:BURL) with a steady price target of $344.00. Lejuez anticipates the company's fourth-quarter earnings per share (EPS) to surpass both the market consensus and the company's own projections. Citi's estimate stands at $3.94, compared to the consensus of $3.76 and Burlington's guidance range of $3.55 to $3.75. According to InvestingPro data, Burlington currently trades at a P/E ratio of 33.1x, with analysts setting price targets ranging from $293 to $380.
The analyst's expectations are based on a projected 3.0% increase in comparable store sales, which is higher than the Factset consensus of 2.2% and the company’s guidance of flat to +2.0%. This forecast is bolstered by Placer traffic data indicating a significant 9.5% increase in foot traffic to Burlington Stores in the fourth quarter, an upturn from 6.9% in the third quarter. The uptick in store visits is attributed, in part, to colder weather conditions in December.
Lejuez also suggests that Burlington's management is likely to set a conservative comparable sales growth outlook for fiscal year 2025, ranging from 0% to 2%, which is below the consensus estimate of 2.5%. This aligns with the expectations management set during their third-quarter 2024 earnings call. Additionally, Citi forecasts Burlington will provide EPS guidance for fiscal year 2025 between $8.55 and $9.15, which is slightly lower than the current consensus of $9.43.
The analysis acknowledges a negative shift in investor sentiment due to third-party credit card data that point to a slowdown in January, a trend that has persisted into February. Despite these concerns, Lejuez believes that the combination of a strong fourth-quarter performance and potentially conservative guidance for the next fiscal year presents a balanced risk/reward scenario for Burlington Stores as the quarter concludes. InvestingPro subscribers can access 8 additional ProTips and comprehensive valuation metrics, including Fair Value estimates and financial health scores, to make more informed investment decisions. The platform's detailed Pro Research Report offers deep insights into Burlington's performance, available alongside 1,400+ other top US stocks.
In other recent news, Burlington Stores has been the subject of various analyst reviews. TD Cowen raised the price target for Burlington Stores to $339 from $334, maintaining a Buy rating while emphasizing the company's growth potential. They predict a compound annual growth rate (CAGR) of over 20% in earnings per share (EPS) for the next three to five years due to various initiatives including merchandising improvements, supply chain enhancements, and automation.
Simultaneously, Baird maintained its Outperform rating on Burlington Stores and increased the price target to $330 from $315. They highlighted Burlington's ability to meet earnings expectations despite softer comparable store sales, emphasizing the company's effective margin management.
Telsey Advisory Group increased the price target for Burlington Stores to $320 from $310, keeping an Outperform rating. Despite a slight revenue shortfall, the company achieved an operating margin expansion of 120 basis points for the quarter, allowing it to meet EPS expectations.
Lastly, Evercore ISI raised the price target for Burlington Stores to $340 from $315, maintaining an Outperform rating. Burlington's gross margin improved by 70 basis points year-over-year to 43.9%, indicating effective financial management despite significant weather-related challenges. These are all recent developments in the financial landscape of Burlington Stores.
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