Hold Rating Maintained for Five Below Amid Tariff Challenges and Growth Potential

Simeon Gutman, an analyst from Morgan Stanley, maintained the Hold rating on Five Below (FIVE – Research Report). The associated price target was raised to $135.00.

Simeon Gutman has given his Hold rating due to a combination of factors influencing Five Below’s performance. The company has shown positive momentum with improvements in product offerings, value, and customer experiences, which are expected to continue into the second quarter of 2025. However, the potential for upside is limited by the dynamic tariff environment, which poses a risk to gross margins, despite Five Below’s efforts to reduce its China exposure through vendor negotiations and sourcing diversification.
While the company has raised its comparable sales guidance for 2025, indicating potential growth, the ongoing tariff challenges are expected to impact earnings before interest and taxes (EBIT) and earnings per share (EPS) growth. The risk/reward scenario presents a wide range, with significant potential upside and downside, leading to the decision to maintain a Hold rating. The price target has been adjusted to $135, reflecting modest upside potential based on the current market conditions.

In another report released on June 3, Mizuho Securities also maintained a Hold rating on the stock with a $100.00 price target.

Based on the recent corporate insider activity of 78 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.