Mizuho Securities analyst David Bellinger has maintained their neutral stance on FIVE stock, giving a Hold rating yesterday.
David Bellinger has given his Hold rating due to a combination of factors impacting Five Below’s financial outlook. Despite a positive reaction to the company’s Q4 results and management’s efforts to enhance merchandising within the core price points, the company faces significant challenges from tariff headwinds. These tariffs are expected to detract approximately 100 basis points from margins, creating a delicate balance between price increases and maintaining a value-oriented message.
Additionally, while Q1-to-date comparable sales are running within a modest range, the upcoming larger Easter weeks could influence these figures. The guidance for FY25E reflects known tariffs but does not account for potential reciprocal actions, with some tariff rates on Chinese products reaching up to 45%. Furthermore, despite revenue growth and beating EPS expectations, there was a contraction in gross margins and an increase in SG&A expenses. These factors, combined with the anticipated pressures from tariffs and other cost challenges, have led to a lowered price target of $88, reinforcing the Hold rating.
In another report released yesterday, Morgan Stanley also maintained a Hold rating on the stock with a $110.00 price target.
Based on the recent corporate insider activity of 74 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of FIVE in relation to earlier this year.