Final Recomendation

Analyzing the models 

Figure 1 presents the overall valuation estimate of BURL based on two models: the Cash Flow Model and the Market Multiples model, detailed in posts 8 and 9 respectively. 

According to the Cash Flow Model, the calculated stock price is $122.9, reflecting a downside of -31.3%. On the other hand, the Market Multiple approach yields a final stock price of approximately $132.72, indicating a downside of -25.9% (with the stock trading at $179 as of April 17th, 2024, in both models). Despite the slight variance in their results, both models suggest that BURL is overvalued.

These models offer valuable insights into predicting the company's value. The Market Multiple approach allows for a broader industry perspective by analyzing the performance of similar companies, while the Cash Flow model focuses on BURL's specific future prospects, growth rate, and present-day value.

As noted in post 9, the ROPI model did not offer a suitable evaluation for BURL due to negative actual NOPAT in most fiscal years, leading to its exclusion from the final calculation using all models.

Utilizing both the Cash Flow model and the Market Multiple approach, the overall stock price estimate is $127.86 (as shown in Figure 1). Compared to the current price of $179 as of April 17th, 2024, this indicates a downside of -29%, underscoring the notion that the company's stock is overvalued.

Investment Recommendation 

I'd suggest selling BURL stock. While it shows growth potential and aims in that direction, currently it's overvalued. Both models provided a lower price than what the stock  was trading at on April 17th, 2024. Today, on April 23rd, 2024, the price dropped to $177.64, affirming one more time the decision to sell. 

One if Burlington's growth strategy in focused on store expansion, which is viable for now. However, considering the shift toward online platforms, it's advisable for BURL to explore such opportunities.

Comparing recommendations

• Figure 2 illustrates FactSet Targets and Ratings, indicating that the majority of analysts consider BURL's stock to be a favorable investment. As of April 24, 2024, the stock price stands at 180.75, notably lower than the target price of 243.32, reflecting a substantial downside of -35%. This deviation is noteworthy, particularly when compared to previous months' targets and actual prices, which align closely together. 

• In Figure 3, the Analysts recommendations from Yahoo Finance mirror those of FactSet, with most analysts advocating for a buy position on the stock. The average target closely aligns with that of FactSet, suggesting a consensus opinion regarding the company and market outlook.

These recommendations diverge significantly from my own assessment, highlighting a disparity in estimated values. While the rationale behind this contrast is unclear, it prompts consideration that these analysts may possess an overly optimistic outlook for the future. Consequently, further research on my part may be warranted to better understand the discrepancy.