Stock Of The Day Shows Earnings Resilience Amid Hunt For Value

Burlington Stores

Burlington Stores

BURL

$3.67



1.59%



67%

IBD Stock Analysis

• High handle buy point at 243.64. Break of trendline could mark early entry.

Composite Rating

Industry Group Ranking

Emerging Pattern

Cup with Handle

* Not real-time data. All data shown was captured at
1:08PM EDT on
06/14/2024.

Retail stock Burlington Stores is the IBD Stock of The Day as it tries to regain a buy point. Burlington Stores (BURL) briefly broke out May 30 after an earnings beat-and-raise report.

The off-price apparel retailer is known for “everyday low prices” on branded apparel, footwear, accessories and home goods.

Broadly, discount retailers continue to act well as consumers turn more cautious with scant relief from inflation.

X

Retail Stock Finds Support Near Buy Point

Burlington Stores stock slipped 1.5% on the stock market today. It held above the recent June 10 low, and also remains above the 21-day and 50-day moving averages, a positive sign.

The Burlington stock chart shows a first-stage, cup-shape base with a 232.69 buy point, according to MarketSurge pattern recognition. Shares staged an 18% earnings breakout in huge volume on May 30. Straight up from the bottom-type breakouts carry an elevated element of risk, and shares quickly pulled back below the buy point.

The retail stock closed on Friday just 2% below the latest entry and near two-year highs.

A May 31 high provides a potential high handle entry at 243.64. The pullback from that high has established a downtrend. Investors could treat a break above a trendline drawn across the highs of that trend as a possible early entry.

Among other favorable signs, BURL stock shows an Accumulation/Distribution Rating of B, which indicates moderate institutional buying.

However, much of the cup base formed below the 50-day line. Moreover, the relative strength line is lackluster. The RS line shows significant lag in recent years.

Burlington stock earns a 91 Relative Strength Rating out of a best-possible 99. That is up from 75 four weeks ago. The RS Rating means that Burlington Stores stock has outperformed 91% of all stocks in IBD’s database over the past year.

Year to date, BURL stock has jumped 17%. It has surged 53% over the past 12 months.

Among other discount retailers, TJX (TJX) is extended above a 102.04 buy point. Ross Stores (ROST) is arguably actionable from a 145.18 handle entry.

Other off-price retailers acting well amid the consumer search for value include Costco (COST), Walmart (WMT) and Ollie’s Bargain Outlet (OLLI).

On the other hand, Target (TGT) is struggling amid signs that consumers are trading down to rivals like Walmart.

Burlington Stores Earnings

On May 30, Burlington stores reported that earnings per share jumped 61% in the April-ended quarter. Sales and guidance also came in strong, though the company flagged economic uncertainty.

Analysts expect double-digit earnings and revenue growth to continue in upcoming quarters, FactSet shows.

For the full fiscal year, they expect Burlington earnings to jump 27% on 9% sales growth. They expect EPS of $7.68 for the year, above the $7.55 midpoint of the retailer’s own raised guidance in May.

Burlington Stores shows a solid 97 Composite Rating out of a best-possible 99. The Composite Rating combines various technical and fundamental metrics into one easy-to-read score.

Burlington stock bears a strong-enough 81 EPS Rating. That reflects Burlington Stores’ powerful earnings rebound since a 49% collapse in fiscal 2023.

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