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Analysts Are Bullish on Five Below’s Strong Fiscal Q2 Results

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Updated

Target prices revised upward

There have been quite a few target price changes for Five Below (FIVE) since it reported robust results for its fiscal second quarter (which ended on August 4) on September 6.

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

  • UBS: from $117 to $126
  • Wells Fargo: from $105 to $143
  • Jefferies: from $97 to $150
  • JPMorgan Chase: from $116 to $150
  • RBC: from $114 to $128

Five Below’s mean target price is $133.19, which indicates a ~1.8% upside to its price as of September 7. A total of ~56.0% of the 18 analysts covering the stock have given it “buy” ratings, while the remaining 44.0% have given it “holds.”

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Snapshot of second-quarter results

Second-quarter sales of $347.7 million rose 22.7% year-over-year and beat analysts’ consensus estimate by 3.9%. This top line growth was driven by new store openings.

Higher sales along with a reduction in income tax expense aided the company’s bottom line growth. Its EPS came in at $0.45, beating the consensus estimate by 18.4%. YoY, its EPS were up 50%. Given these strong results, Five Below increased its fiscal 2018 EPS guidance. Its EPS are now expected to be in the range of $2.51–$2.57 compared to the $2.42–$2.48 it had projected earlier.

Where do its peers stand?

Of the 29 analysts covering Dollar General (DG) stock, 59.0% have recommended “buys,” and 38.0% have recommended “holds” on its stock. The 12-month average target price for DG is $115.24, which reflects a ~4.0% upside based on its September 7 price.

Of the 27 analysts covering Dollar Tree (DLTR) stock, 63.0% have recommended “buys,” and 37.0% have recommended “holds.” The 12-month average target price for DLTR is $97.63, which reflects an 18.7% upside.

Of the 12 analysts covering Big Lots (BIG) stock, 58.0% have recommended “buys,” and 42.0% have recommended “holds.” The 12-month average target price for BIG is $47.09, which reflects a 9.4% upside.

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