As macroeconomic uncertainties linger, Loop Capital says investors should consider adding this inflation-fighting retail stock to their portfolios. Analyst Laura Champine upgraded shares of Burlington Stores to a buy from a hold rating, in a Tuesday note to clients that said the availability of more premium brands at better prices should help the retailer take share from its competitors. “We think persistent inflation is tough for Burlington’s customers, and the improved values and brands in stores are likely to drive market share gains for the company,” she wrote. “It’s now clear better execution over the holiday period was not a fluke, and we see evidence of continued better sell-through as clearance racks remain appropriately lean.” BURL YTD mountain Burlington shares so far in 2023 So far this year, shares of Burlington Stores have gained 2%. The upward price action follows a more than 30% tumble last year as the retail sector grappled with shifting consumer spending patterns in a sticky inflationary environment and inventory gluts. But now, the tides have shifted, with Champine noting particularly strong inventory improvements among ladies apparel and premium brands. Given this shift, she lifted the off-price retailer’s price target to $225 from $220 a share, or about 9% upside from Monday’s close. “Our March/April checks see mid-tier brands back in stock, robust inventory, and notably better values,” she wrote. “Burlington is using new, simple signage to call out its entry-level price points, and we think this is perfect for today’s consumer.” Along with the upgrade and price target adjustment, Champine upped the firm’s consensus sales and earnings per share estimates, expecting total sales growth of 13% for the full-year. “We think likely outperformance this year, unit growth potential, and margin expansion opportunities justify the premium valuation for Burlington compared to TJX and ROST , and we see positive catalysts for the shares throughout the year” and the next few quarters, she said. — CNBC’s Michael Bloom contributed reporting
