Burlington (BURL) was a featured write-up on 9/26 and a well-timed one as shares bottomed shortly thereafter and have doubled in just over three months while the March $150 calls highlighted remain in open interest at +588%.

We wrote:

“Burlington Stores (BURL) on 9/22 saw a large buyer of 1000 March $150 calls at $10.90 for $1.1M in premium bought and this follows a buyer on 9/15 for 300 January $150 calls at $14.60. BURL has also seen opening put sellers active the past month in October $120 puts sold at $2.79 and Oct $115 puts sold at $1.41. Shares are at 2022 lows and quite close to the March 2020 lows which are near 110. The stock has pulled back since the rally into mid-August peaked near 170 and a key resistance level. Short term oversold so the bullish flows come at an interesting point where a snapback rally can materialize into October. The weekly chart is firmly in a downtrend with 8/21 EMA in bear mode all year. First resistance overhead would be 140 monthly VPOC. The $7.9B company trades at 22.6x earnings, 1.0x EV/sales, and FCF yield of 2.9%. The Company operates approximately 866 retail stores in approximately 45 states and Puerto Rico. It sells in-season, fashion-focused merchandise, including women’s ready-to-wear apparel, menswear, youth apparel, baby, beauty, footwear, accessories, home, toys, gifts and coats. BURL missed Revenues last quarter and lowered guidance due to heightened promotions to drive sales as most retailers have seen. Average analyst target is $177 with Street high of $368. JPM Morgan boosted its target this month to $179 from $152 and keeps an Overweight rating as they cite consumer and retail CEOs remain tempered on second half of 2022 expectations given the broader macroeconomic environment, but nearly every company cited signs of improvement in August relative to the June trough. Baird recently raised its target to $205 and kept an Outperform saying that new guidance appears prudently conservative with room for upside. Cowen lowered their target to $160 while stating that the company is struggling to maintain its competitive value gap versus non-off-price peers. Short interest is at 5.5%. Hedge fund ownership rose 1.2%.”