US stock futures dip as Nvidia earnings spark little cheer
Investing.com - UBS has reiterated a Buy rating on Five Below (NASDAQ:FIVE) with a price target of $160.00, citing expectations for strong second-quarter results and potential for sustained outperformance. The stock currently trades at $141.81, just 0.98% below its 52-week high, reflecting strong momentum. According to InvestingPro data, 8 analysts have recently revised their earnings estimates upward for the upcoming period.
The investment firm anticipates Five Below will deliver better-than-expected flow-through from its strong comparable sales, potentially exceeding consensus forecasts by 20 basis points or more in overall operating margin expansion. With earnings scheduled for August 27 and the company maintaining a healthy gross profit margin of 35%, UBS believes this upcoming earnings report could serve as a positive catalyst for the stock. InvestingPro subscribers can access detailed financial health metrics and 10+ additional expert insights about Five Below.
While Five Below might maintain a conservative outlook for the third and fourth quarters, UBS sees the retailer as "well positioned for an upward estimate revision cycle." The firm expects Five Below to forecast low-to-mid single digit comparable sales in the second half of the year, which would provide room for upside and expense leverage to offset tariff costs.
UBS identifies multiple growth catalysts for Five Below, including recent execution improvements, labor investments, new product trends, improved merchandising innovation, and new marketing initiatives. These factors lead UBS to believe comparable sales won’t slow from 8-9% in the second quarter to the 1.5% implied by the company’s second-half guidance.
The investment firm notes that Five Below is trading at approximately 27.5 times next-twelve-months price-to-earnings ratio, below its 10-year average of about 31 times, suggesting potential for stock appreciation despite tariff challenges and tougher year-over-year comparisons. The company has demonstrated impressive performance with a 71.97% return over the past year and revenue growth of 10.71%. Get comprehensive valuation analysis and Fair Value estimates for Five Below and 1,400+ other stocks with an InvestingPro subscription.
In other recent news, Five Below has been the focus of several analyst updates and price target adjustments following its strong performance and positive outlook. Craig-Hallum raised its price target for Five Below to $164, maintaining a Buy rating, citing strong same-store sales driven by increased customer traffic and higher average ticket sizes. UBS also increased its price target from $110 to $160, highlighting the company’s recent strong performance and suggesting that conservative future trend assumptions could lead to further stock price revisions.
Meanwhile, Loop Capital adjusted its price target to $130 from $90, following impressive first-quarter results, while maintaining a Hold rating. The firm noted the effectiveness of management’s new strategic vision, which includes improvements in merchandising and marketing. Mizuho raised its price target to $132, reflecting expectations that Five Below’s comparable sales will surpass the company’s guidance and potentially reach double-digit growth.
Barclays reiterated its Equalweight rating with a $120 price target, despite anticipating meaningful upside in the second-quarter results. These recent developments indicate a positive outlook for Five Below, with multiple firms recognizing its strong sales momentum and strategic advancements.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.