Cowen reiterates an Outperform rating and $67.00 price target on Burlington Stores (NYSE: BURL) leading up to its Q1 earnings release. With off-price sector tailwinds with both TJX and ROST, analyst John Kernan believes that the there is upside potential for BURL as well. BURL is scheduled to release its Q1 report on June 9th.

Kernan commented, "BURL shares have contracted -12% since late March and valuation multiples contracted for TJX and ROST post Q1 results that beat expectations. We view BURL as uniquely positioned to withstand the macro environment along with competition and new off-price entrants. We model FCF growing at a 32% CAGR through 2019 with the potential to return cash to shareholders by 2017."

Kernan also added, "The off-price sector tailwind continued into Q1 with both TJX ($66, OC - Outperform) and ROST ($98, OC - Market Perform) posting solid SSS performance, implying upside potential to BURL's Q1 SSS outlook. TJX's Marmaxx and HomeGoods divisions reported Q1 SSS of 3% and 9%, respectively while ROST reported 5% SSS. We are forecasting BURL Q1 EPS of $0.40, in-line with consensus and at the top-end of management's guidance for $0.36-$0.40, driven by our SSS estimate of 4.5%, a slight sequential deceleration on a 2-year stacked basis but above guidance for +2-3% and consensus of ~3%. Our Consumer Tracker survey data shows BURL visitation among the total population improved by roughly 200bps in Q1 vs. last year, implying traffic trends are favorable and investments in marketing are working."

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Shares of Burlington Stores closed at $54.44 yesterday.