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Investing.com - Guggenheim raised its price target on Five Below (NASDAQ:FIVE) to $165.00 from $155.00 on Friday, while maintaining a Buy rating on the discount retailer’s stock. According to InvestingPro data, the stock has shown remarkable momentum with a 72.67% return over the past six months, and 18 analysts have recently revised their earnings estimates upward.
The price target increase comes as Five Below shares showed strength in pre-market trading, outperforming the S&P 500 index which was indicating a relatively flat open. This recent outperformance reflects what Guggenheim describes as a "potentially conservative" second-half outlook for both top and bottom lines.
Guggenheim noted that most investors had anticipated a significant second-quarter beat, with data suggesting a comparable sales increase of more than 10%. The firm also indicated that momentum has continued through August, supporting a healthy initial third-quarter outlook.
The revised $165 price target implies only a one-turn improvement in the company’s EBITDA multiple from the current 11.9x based on Guggenheim’s 2026 estimates. Historically, the multiple has been above 15x, which would hypothetically put the stock price at around $190.
Despite the positive outlook, Guggenheim acknowledged that tariff-related macroeconomic uncertainty remains ahead of the critically important holiday selling season for the retailer.
In other recent news, Five Below reported a strong performance for the second quarter, with comparable sales growth exceeding 12%. This robust result led several analyst firms to adjust their price targets for the company. Craig-Hallum raised its price target to $180 while maintaining a Buy rating, highlighting the retailer’s impressive third-quarter guidance. UBS also increased its target to $184, citing that much of the sales growth was due to increased transaction volume. Jefferies followed suit, raising its target to $185, praising the company’s strong execution and market positioning. Truist Securities adjusted its price target to $148, noting that Five Below’s results surpassed their revised estimates. KeyBanc reiterated its Sector Weight rating, attributing the company’s success to strong merchandising and product innovation. These developments reflect a positive outlook from analysts following Five Below’s recent quarterly performance.
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