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Analysts Are Bullish on Five Below’s Strong Q1 2018 Results

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Target prices go up

On June 6, Five Below (FIVE) reported strong numbers for its fiscal first quarter. That prompted ten analysts to raise their price targets for the stock.

Five Below’s sales of $296.3 million and adjusted EPS of $0.35 easily beat the Wall Street estimate of $291.1 million and $0.32, respectively. Sales increased 27.2% year-over-year, driven mainly by new store openings. Comparable store sales were up 3.2%. In addition to new store openings, the company gained leverage in expenses and a lower tax rate, which led to a strong quarterly performance.

Let’s see how analysts revised their target prices for Five Below.

  • Barclays: from $68 to $80
  • Deutsche Bank: from $84 to $111
  • Jefferies: from $85 to $97
  • JPMorgan Chase: from $87 to $107
  • Credit Suisse: from $88 to $96

Currently, analysts’ 12-month average target price for the company is $97.56, which reflects a 1.5% downside to its price on June 7.

On June 7, there were 18 analysts covering Five Below stock, and 67% of them were recommending a “buy.” The remaining 33% were recommending a “hold.”

Where do peers stand?

About 71% of the 28 analysts covering Dollar Tree (DLTR) have given the stock a “buy” rating, and 29% have rated it a “hold.” Of the 30 analysts covering Dollar General (DG), 57% have given it a “buy” rating, and 40% have rated it a “hold.”

Of the 13 analysts covering Big Lots (BIG), 54% have rated it a “buy,” and the rest have rated it a “hold.” The one analyst covering Fred’s (FRED) has rated the stock a “hold.”

The mean target price for Dollar Tree is $104.33, which indicates a 27.3% upside to its price on June 7. Analysts’ target price for Dollar General is $105.38, reflecting a 12.3% upside as of June 7. For Big Lots, the mean target price is $47.82, which indicates a 12% upside. The mean target price for Fred’s is $4, which indicates 141% upside.

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