Citi raises Five Below stock price target to $135 from $121

On Thursday, Citi analysts adjusted their outlook on Five Below stock (NASDAQ: NASDAQ:FIVE), raising the price target to $135 from $121 while maintaining a Neutral rating. Currently trading at $121.24 with a market capitalization of $6.73 billion, InvestingPro analysis suggests the stock is slightly undervalued. The decision follows the company’s first-quarter performance, which slightly exceeded previously announced expectations in terms of comparable sales and earnings per share (EPS).

The analysts noted that trends in the current quarter have shown improvement compared to the first quarter, leading to a 7-9% guidance increase for second-quarter comparable sales. This aligns with the company’s robust revenue growth of 8.91% over the last twelve months. Management has also adjusted its fiscal 2025 comparable sales guidance upwards, now expecting a 3-5% increase, compared to the prior estimate of 0-3%. Despite facing a 50 basis point tariff headwind, the lower end of the fiscal 2025 EPS guidance range has been raised.

Sales momentum for Five Below is reportedly driven by better execution in areas such as marketing, product availability, and product assortment, along with increased investments in labor. While the second half guidance remains conservative, analysts suggest there could be potential upside to fiscal 2025 EPS if current sales trends persist.

Citi analysts also conveyed that while there is near-term potential for share price increase due to strong sales and possible EPS upside, they view the risk/reward balance as more even over the next year.

In other recent news, Five Below reported first-quarter earnings for fiscal year 2025 that surpassed expectations, with earnings per share (EPS) of $0.86, exceeding the forecasted $0.66. Revenue also outperformed projections, reaching $970.5 million against a $932.86 million forecast. The company saw a comparable sales increase of 7.1%, driven by strong store traffic and conversion rates. Following these results, Jefferies raised its price target for Five Below stock to $155, maintaining a Buy rating, while Telsey increased its target to $128, up from $90, with a Market Perform rating. BofA Securities also adjusted its price target to $93 from $78, although it maintained an Underperform rating due to concerns about potential challenges. Additionally, Five Below announced a transition in its Chief Financial Officer position, with Kristy Chipman stepping down for personal reasons and Ken Bull stepping in as interim CFO. Despite the positive first-quarter performance, the company remains cautious about the second half of 2025 due to tariff pressures and other economic factors.

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