Edward Kelly, an analyst from Wells Fargo, maintained the Buy rating on Five Below (FIVE – Research Report). The associated price target remains the same with $140.00.
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Edward Kelly has given his Buy rating due to a combination of factors that suggest Five Below is on a strong recovery path. The company’s management has effectively implemented a turnaround strategy, focusing on customer engagement, improved merchandising, and strategic pricing adjustments. These efforts have resulted in positive sales momentum, particularly in categories like collectibles and beauty, which are expected to continue into the second half of the year.
Additionally, Five Below has successfully navigated tariff pricing challenges by collaborating with vendors and adjusting its product assortment. Despite these changes, the company has maintained its value proposition, with most items priced at $5 or less, and has not experienced significant negative elasticity impacts. Furthermore, while the company is cautious about committing to a specific margin goal, there is optimism about incremental margin improvements as store investments are largely complete. The potential for accelerated store growth and conservative guidance further supports the positive outlook for Five Below’s stock.
In another report released on June 24, Goldman Sachs also maintained a Buy rating on the stock with a $135.00 price target.