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Investing.com - Barclays maintained its Equalweight rating and $120.00 price target on Five Below (NASDAQ:FIVE) on Monday, despite expectations of meaningful upside in the retailer’s second-quarter results. The company, currently valued at $7.8 billion with a P/E ratio of 29.6x, has caught analysts’ attention with 8 upward earnings revisions for the upcoming period, according to InvestingPro data.
The discount retailer’s stock has gained 17% since its first-quarter results, outperforming the S&P 500’s 8% increase during the same period, indicating market anticipation of strong Q2 performance.
Barclays suggests that Five Below could potentially maintain positive momentum with mid-single-digit comparable sales growth in the second half of the year and into next year, though the drivers of this growth will need to evolve as the company faces tougher comparisons in the second half.
The firm notes that recent upside has largely come from improving conversion rates and "lower hanging fruit" opportunities, while price elasticity has performed better than expected so far, though Barclays assumes this will slightly worsen in the second half.
Tariffs present a potential risk for Five Below, with Barclays indicating that proposed rates, if implemented, would create a more challenging environment than anticipated during the first quarter, potentially impacting fiscal year 2026 performance rather than the current fiscal year 2025 guidance.
In other recent news, Five Below has seen a series of price target increases from several analyst firms. Craig-Hallum raised its price target to $164, citing strong same-store sales driven by increased customer traffic and higher average ticket sizes. UBS also increased its price target to $160, maintaining a Buy rating, and highlighted the company’s strong recent performance and conservative future assumptions. Meanwhile, Mizuho adjusted its target to $132, with expectations that Five Below’s comparable sales could exceed the company’s guidance and reach double-digit growth. Loop Capital set its new target at $130, emphasizing the company’s strong first-quarter results and effective management strategies in merchandising and marketing. Truist Securities raised its target to $128, noting a strong start to the year but cautioning about potential tariff pressures affecting future earnings. These developments reflect a positive outlook from analysts regarding Five Below’s performance and strategic initiatives.
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