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On Tuesday, UBS reaffirmed its positive stance on Five Below stock (NASDAQ:FIVE), maintaining a Buy rating and a price target of $110.00, close to the current trading price of $108.94. The focus of the market is anticipated to shift towards the discount retailer’s strategies for the upcoming quarters, especially the second quarter and the outlook for 2025, following the pre-announcement of its first-quarter results. According to InvestingPro data, 15 analysts have recently revised their earnings expectations upward for the upcoming period, with price targets ranging from $78 to $160.
The analyst from UBS noted that Five Below’s shares have experienced a significant rebound, fueled by positive developments regarding tariffs and stronger-than-expected performance in the first quarter. The stock has demonstrated impressive momentum, posting a 31.1% return over the past six months and a 7.13% gain in the past week. The market is now looking forward to understanding how the company will handle the rest of the year amidst these factors.
Five Below’s stock recovery can also be attributed to the recent easing of tariff pressures, which has been a boon for many retailers. The company’s ability to maintain sales momentum is seen as a key driver for future growth.
The UBS analyst highlighted the potential for further share price increases, citing a "rich catalyst path" for Five Below. This path includes several factors that could contribute to the stock’s upward trajectory from its current levels.
Investors and market watchers will likely keep a close eye on Five Below’s upcoming guidance and how the retailer plans to continue its growth amidst the evolving retail landscape. The current price target of $110.00 set by UBS reflects confidence in the company’s ability to achieve its goals and deliver value to shareholders. For deeper insights into Five Below’s valuation and growth potential, InvestingPro subscribers can access comprehensive analysis, including 8 additional exclusive ProTips and detailed financial health metrics that currently rate the company as "GOOD."
In other recent news, Five Below reported first-quarter earnings for 2025 that surpassed expectations, prompting Loop Capital Markets to raise the company’s stock price target to $90 while maintaining a Hold rating. The retailer also increased its first-quarter guidance, now anticipating net sales of about $967 million and projecting a significant rise in comparable store sales by approximately 6.7%. Five Below plans to open 55 new stores during the quarter, five more than initially planned, and expects diluted income per share between $0.69 and $0.71, exceeding earlier projections. Additionally, JPMorgan upgraded Five Below’s stock rating from Underweight to Neutral, although it cut the price target to $57, citing potential margin pressures and increased labor investments. UBS also adjusted its price target to $110 from $150, maintaining a Buy rating, while acknowledging the company’s turnaround strategy amid tariff challenges. Guggenheim similarly reduced its price target to $125 but reiterated a Buy rating, highlighting the potential for near-term multiple expansion despite tariff-related margin pressures. These developments indicate a period of strategic adjustments and cautious optimism for Five Below as it navigates various economic challenges.
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