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Investing.com - Mizuho (NYSE:MFG) has raised its price target on Five Below (NASDAQ:FIVE) to $132.00 from $115.00 while maintaining a Neutral rating on the stock ahead of the company’s second-quarter earnings report, due August 27. With a market capitalization of $7.78 billion and 6 analysts recently revising earnings estimates upward, the discount retailer has caught Wall Street’s attention. InvestingPro data shows the company maintains healthy financials with a current ratio of 1.71.
The price target increase reflects Mizuho’s expectations that Five Below’s comparable sales will "easily top" the company’s guidance of 7-9% growth and potentially reach double-digit percentage increases.
According to Mizuho, the sales acceleration stems from an improving product assortment, particularly in value-oriented summer seasonal items, emerging trends with LaBabies and Pokémon merchandise, and modest price increases across stores.
The research firm identified additional growth opportunities for Five Below in the balloons/party category, expansion of apparel and activewear offerings, and potentially removing the sectioned-off Five Beyond area from stores.
Despite the positive outlook, Mizuho maintained its Neutral rating, noting that Five Below shares may be "due for a breather" after rising approximately 35% year-to-date compared to the S&P 500’s 10% gain during the same period.
In other recent news, Five Below reported strong fiscal first-quarter 2025 results, which have led several analyst firms to adjust their price targets for the company’s stock. Loop Capital raised its price target to $130 from $90, citing the effectiveness of management’s strategic vision, including improvements in merchandising and store operations. UBS increased its target to $160 from $110, maintaining a Buy rating, and highlighted the company’s strong performance and conservative future assumptions as reasons for potential upward revisions. Truist Securities adjusted its target to $128 from $112, noting that while the first half of the year has exceeded expectations, tariff pressures may impact earnings later. Craig-Hallum also raised its target to $152 from $133, emphasizing a 7% increase in same-store sales and successful strategies to mitigate tariff impacts.
Additionally, Five Below has partnered with Uber (NYSE:UBER) Eats to offer nationwide delivery from over 1,500 locations, allowing customers to order a variety of items through the Uber Eats app. This partnership aims to enhance consumer convenience by providing easy access to Five Below’s affordable and trendy products. These developments reflect Five Below’s continued efforts to adapt to market demands and expand its reach through strategic initiatives.
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