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Jefferies upgrades Five Below with a $350 price target
Jefferies tied the call to a merchant-led shift that lifted comparable sales 23% in the first financial quarter, and forecast EPS to compound at a 27% annual pace through fiscal 2029.
Five Below (FIVE) shares extended gains after Jefferies upgraded the discount retailer and raised its price target to $350, implying upside of more than 40% from current levels, according to Yahoo Finance.
Jefferies said Five Below is seeing broad-based organic growth driven by a merchant-led transformation, with comparable sales up 23% in the first financial quarter. The firm added that even without the trend benefit, core same-store sales would have fallen in the high-single digits, and it pointed to resilient foot traffic in Q2 to support customer engagement beyond product-specific spikes.
The note also highlighted a seasonal green-tape history, saying the stock has closed both September and October higher in past periods. Jefferies further argued Five Below could be set up for a multi-year valuation re-rating similar to off-price peer TJX Companies, supported by productivity gains and store network expansion.
Jefferies expects steady double-digit revenue growth through fiscal 2029 and modeled EPS to compound at about a 27% clip. It raised fiscal 2027 and fiscal 2028 revenue estimates by 2% and 5%, respectively, and lifted EPS projections by 5% and 21%, while noting that other Wall Street firms were less bullish over the next 12 months, per the report.