Burlington Stores Poised for Market Share Gains, UBS Says

MT Newswires Live06-11

Burlington Stores (BURL) is set to continue gaining market share and improving profitability as it strengthens merchandising, inventory allocation, and supply chain efficiency, UBS Securities said Thursday in a report.

The company is projected to outperform over the next 12 months, with stronger-than-expected earnings potentially driving upward revisions to consensus EPS estimates and improving investor sentiment, the report said.

UBS forecasts a 17% compound annual growth rate in EPS over the next five years and says that outlook supports valuing the stock at about 26 times expected earnings, a level viewed as justified by Burlington's growth profile.

Despite strong value perception, UBS cited room for improvement. About 33% of customers view Burlington as significantly cheaper than last year, and 46% have an improved value-for-money perception, the report said.

"As the company executes its Burlington 2.0 strategy, its assortment and service levels will improve," the report said. "This should lead to better customer loyalty scores, in our view, and durable revenue growth rates."

UBS has a buy rating on Burlington stock with a $435 price target.

Price: 336.32, Change: +9.31, Percent Change: +2.85

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