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Investing.com - Craig-Hallum raised its price target on Five Below (NASDAQ:FIVE) to $164.00 from $152.00 on Wednesday, while maintaining a Buy rating on the discount retailer’s stock. The stock currently trades at $140.64, near its 52-week high of $143.88. According to InvestingPro data, 7 analysts have recently revised their earnings expectations upward for the upcoming period.
The research firm cited consistently strong same-store sales in recent months, driven by both increased customer traffic and higher average ticket sizes. Five Below has maintained momentum in its Licensed/Collectibles products along with Tech, Room, and Candy categories. This momentum is reflected in the company’s solid 10.71% revenue growth and healthy gross profit margin of 35.02%, as reported by InvestingPro.
Price changes implemented in June have resulted in better average unit retail prices with less unit degradation than expected, according to Craig-Hallum’s analysis. The firm noted that same-store sales momentum has continued into the third quarter despite tougher year-over-year comparisons, with Back-to-School products like Licensed backpacks offering compelling value.
Craig-Hallum identified several potential catalysts beyond the upcoming second-quarter report, including the possibility of declining China tariffs and the likelihood that Five Below will reduce its inventory shrink accrual rate when reporting third-quarter results. With the next earnings report due on August 27, investors can access comprehensive analysis and additional insights through InvestingPro’s detailed research reports, which include 12 more exclusive ProTips about Five Below’s performance and outlook.
The firm also highlighted that sell-side sentiment on Five Below stock is currently at its most negative level in company history, with many analysts concerned about tariff uncertainty despite recognizing improvements in fundamentals.
In other recent news, Five Below has seen a series of analyst upgrades and increased price targets following its strong financial performance. UBS analysts raised their price target for Five Below to $160 from $110, maintaining a Buy rating, citing the company’s strong recent performance and potential for continued momentum. Similarly, Craig-Hallum increased their price target to $152 from $133, also maintaining a Buy rating, after the company reported a 7% increase in same-store sales in the first quarter. Loop Capital adjusted their price target to $130 from $90, maintaining a Hold rating, noting the effectiveness of Five Below’s new strategic vision in merchandising and marketing.
Truist Securities raised their price target to $128 from $112, maintaining a Hold rating, while acknowledging that tariff pressures might impact earnings in the latter half of the year. Mizuho (NYSE:MFG) also raised their price target to $132 from $115, maintaining a Neutral rating, expecting Five Below’s comparable sales to potentially reach double-digit growth. The company has focused on enhancing labor efforts, refreshing store environments, and offering extreme-value price points, which analysts believe are contributing to its robust performance. Despite some anticipated challenges, analysts remain optimistic about Five Below’s growth trajectory.
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