Strength Seen in Burlington Stores (BURL): Can Its 11.2% Jump Turn into More Strength?
Zacks Investment Research | Mar 05, 2021 05:29AM ET
Burlington Stores (NYSE:BURL) shares soared 11.2% in the last trading session to close at $281.99. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 0.4% gain over the past four weeks.
Shares of Burlington Stores got a boost following the company’s stronger-than-anticipated fourth-quarter fiscal 2020 results. We note that comparable store sales trend improved sequentially throughout the quarter, with the metric registering double-digit growth in January, thanks to federal stimulus checks. Also, management raised its long-term store target to 2,000 from 1,000 stores - further lifting investor sentiment.
Incidentally, the company posted adjusted earnings of $2.44 per share that comfortably surpassed the Zacks Consensus Estimate of $2.12. Total revenues of $2,282.9 million came ahead of the Zacks Consensus Estimate of $2,078 million and increased 3.4% from the year-ago quarter.
Well, the stock looks well poised from here to carry the momentum, given the company's robust business model, successful execution of Burlington 2.0 strategy and strong growth prospects.
Price and Consensus
This discount retailer is expected to post quarterly earnings of $0.50 per share in its upcoming report, which represents a year-over-year change of +110.5%. Revenues are expected to be $1.56 billion, up 94.3% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Burlington Stores, the consensus EPS estimate for the quarter has been revised 15.3% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on BURL going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 3 (Hold). You can see Zacks Investment Research
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