On Tuesday, Citi maintained its Buy rating for Burlington Stores (NYSE:BURL) stock, with a steady price target of $258.00. The firm anticipates Burlington's first-quarter earnings per share (EPS) to align with both the consensus and the company's own guidance. The expected EPS is set at $1.06, which is consistent with the consensus and falls within the company's guidance range of $0.95 to $1.10.
Burlington's comparable store sales are projected to grow by 1.0%, which is slightly below the consensus of a 1.7% increase but within the company's guidance of flat to +2%.
Notably, there has been a slowdown in customer foot traffic to Burlington stores, with a growth of 5.7% in the first quarter compared to 12.0% in the fourth quarter, as indicated by Placer traffic data.
Citi's analysis suggests that Burlington management is likely to reaffirm its full-year guidance of $7.00 to $7.60 in EPS, which compares to a consensus of $7.44. Additionally, the company is expected to maintain its long-term operating margin target of 10%.
According to Citi, Burlington's stock is currently less popular among investors compared to its off-price retail peers, and there is an anticipation of some sales and traffic softness across the sector for the quarter.
The report also notes that if Burlington management can provide a positive outlook on recent trends, especially since the company reports its earnings a full week after competitors TJX (NYSE:TJX) and Ross Stores (NASDAQ:ROST), it could positively influence the stock price. This is particularly true given that current expectations are low and any favorable comments could drive shares higher.
InvestingPro Insights
As Citi maintains its optimistic stance on Burlington Stores, a glance at real-time data and InvestingPro Tips offers a deeper financial perspective on the company. Burlington Stores is currently trading at a high Price / Book multiple of 12.21, which can be a point of concern for value-oriented investors. However, the company's P/E Ratio has adjusted to a more attractive 31.61 over the last twelve months as of Q4 2024, which may indicate that the stock is trading at a low P/E ratio relative to its near-term earnings growth, as per one InvestingPro Tip.
Investors should note the stock's volatility, as Burlington Stores has experienced a 1-week price total return of -2.64% and a 3-month return of -1.6%. On the brighter side, the 6-month price total return stands at a robust 15.54%, reflecting a potential for high return over time, which is also corroborated by the InvestingPro Tip highlighting a high return over the last decade. The company's revenue has grown by 11.79% over the last twelve months, with a gross profit margin of 42.54%, indicating a solid profitability framework.
For those seeking further insights and tips, InvestingPro offers additional information on Burlington Stores. To gain access to these valuable resources and enhance your investment strategy, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. Currently, there are 7 additional InvestingPro Tips available for Burlington Stores, which could provide investors with a more comprehensive understanding of the company's financial health and stock potential.
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