Investing.com -- Citi has downgraded Burlington Stores to Neutral from Buy, telling investors in a note Wednesday that the shares have run close to its target price and no longer offer an attractive risk/reward.

The firm noted that the stock is "within 5% of our target price and risk/reward no longer skews to the upside."

Sentiment has turned more positive recently, with many investors seeing potential upside in the third quarter against easier same-store sales comparisons. Citi noted Burlington trades at all-time highs and has risen 18% over the past three months, outpacing Ross Stores at 11% and TJX at 2%.

The bank still expects a strong second quarter, modeling EPS of $2.33 when the company reports Aug. 27, above Visible Alpha consensus of $2.16 and guidance of $2.05 to $2.20. It sees comparable sales up 4%, ahead of consensus, but cautioned that "given where the stock is, we believe the bar is +4%."

Furthermore, the firm expects management to roll the beat through to full-year guidance, as it did in the first quarter, lifting its fiscal 2026 outlook. Citi left its own full-year EPS estimate unchanged at $12.65.

Despite the downgrade, Citi remains constructive on the off-price sector, saying it continues to view "BURL and the off-pricers as well positioned to take share in the current environment and longer-term as other retailers struggle and close stores."

With very high expectations already built into the third quarter and beyond, however, Citi prefers to "move to the sidelines" at current levels.