Investors in Burlington Stores, Inc. (NYSE:BURL) had a good week, as its shares rose 9.9% to close at US$226 following the release of its quarterly results. Burlington Stores reported US$1.8b in revenue, roughly in line with analyst forecasts, although earnings per share (EPS) of US$1.44 beat expectations, being 5.3% higher than what analysts expected. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what analysts are forecasting for next year.
After the latest results, the 17 analysts covering Burlington Stores are now predicting revenues of US$7.93b in 2021. If met, this would reflect a meaningful 12% improvement in sales compared to the last 12 months. Earnings per share are expected to expand 18% to US$7.98. In the lead-up to this report, analysts had been modelling revenues of US$7.94b and earnings per share (EPS) of US$8.00 in 2021. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
With analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 8.1% to US$236. It looks as though analysts previously had some doubts over whether the business would live up to their expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Burlington Stores, with the most bullish analyst valuing it at US$260 and the most bearish at US$160 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Burlington Stores shareholders.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. It's clear from the latest estimates that Burlington Stores's rate of growth is expected to accelerate meaningfully, with forecast 12% revenue growth noticeably faster than its historical growth of 8.3%p.a. over the past five years. Compare this with other companies in the same market, which are forecast to grow their revenue 5.9% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Burlington Stores is expected to grow much faster than its market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. Analysts also upgraded their price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Burlington Stores going out to 2024, and you can see them free on our platform here..
It might also be worth considering whether Burlington Stores's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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