Five Below (FIVE) shares extended gains on Thursday after Jefferies issued a bullish note in favor of the Philadelphia-headquartered chain of discount retail stores. Analyst Randal Konik upgraded FIVE this morning and raised his price target to $350, indicating potential upside of more than 40% from current levels. Konik's research note arrives at a time when Five Below stock is already on an uptrend, currently up more than 35% versus its July low.
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Even without the trend benefit, Five Below's core same-store sales growth would have fallen in the high-single digits, the Jefferies analyst revealed. According to Konik, foot traffic remained resilient in Q2, demonstrating the company is finding success in keeping its customers engaged beyond product-specific spikes. Note that FIVE shares have a history of closing both September and October in the green, a seasonal pattern that further improves their near-term appeal.
Jefferies analyst Konik believes Five Below is positioning itself for a multi-year valuation re-rating akin to off-price leader TJX Companies (TJX). Driven by consistent productivity gains and store network expansion, the discount chain is expected to deliver steady double-digit revenue growth through fiscal 2029. Consequently, Konik models earnings per share (EPS) to compound at an impressive 27% clip, which makes Five Below shares even more attractive as a long-term holding.
Reflecting this heightened visibility, he raised his fiscal 2027 and fiscal 2028 revenue estimates for FIVE by 2% and 5%, respectively, while bumping its EPS projections by 5% and 21%, respectively. Investors should note, however, that other Wall Street firms are not nearly as bullish on FIVE stock for the next 12 months. While the consensus rating on Five Below remains at "Moderate Buy," the mean price target of $260 indicates potential upside of just 7% from here.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
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