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Burlington Stores’ Valuation Compared to Its Peers

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12-month forward PE

As of September 15, 2017, Burlington Stores (BURL) was trading at a 12-month forward PE (price-to-earnings) ratio of 20.8x. The company’s valuation multiple has risen 3.6% since the announcement of its fiscal 2Q17 results in August 2017. Burlington Stores exceeded analysts’ revenue and earnings expectations for fiscal 2Q17. The company also raised its retail net sales and earnings guidance for fiscal 2017 following a strong second quarter.

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Valuation multiple of peers

As of September 15, 2017, off-price retailers TJX Companies (TJX) and Ross Stores (ROST) were trading at a lower valuation multiple compared to Burlington Stores. TJX Companies and Ross Stores were both trading at 12-month forward PE multiples of 17.9x as of September 15.

Burlington Stores’ valuation multiple is higher than the S&P 500 Index, which has a forward PE multiple of 18.1x.

The 12-month forward PE is impacted by various factors, including growth expectations, leverage, and risk-return profile.

Growth expectations

Analysts expect Burlington Stores’ revenue (including other revenue) to rise 8.9% to $6.1 billion in fiscal 2017. In comparison, analysts expect sales of TJX Companies and Ross Stores to rise 7.8% and 8.2%, respectively, in the current fiscal year.

Burlington Stores’ adjusted EPS (earnings per share) is forecast to rise 29.6% to $4.20 in fiscal 2017. Analysts expect adjusted EPS for TJX Companies and Ross Stores to rise 11.3% and 14.1%, respectively, in the comparable fiscal year.

Let’s look at analysts’ recommendations for Burlington Stores stock in the next part of this series.

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