JPMorgan Downgrades Five Below (FIVE) to Neutral

JPMorgan analyst Matthew Boss downgraded Five Below (NASDAQ: FIVE) from Overweight to Neutral with a price target of $170.00 (from $215.00).

The analyst comments "Following our recent fieldwork (including 1000+ consumer survey), and management access including meetings with CFO Kristy Chipman and VP of Investor Relations Christiane Pelz at our 10th Annual Retail Round-Up Conference - we thought helpful to share our key takeaways and multi-year model implications. What Changed: Our work points to an underlying low-to-mid-teens EPS growth profile multi-year post ~100bps of operating margin recapture through FY26 (vs. 20%+ pre-2019 bottom-line profile): Unit Growth/NSP: Mid-teens unit growth (w/ 3,500 saturation reached by FY29 or 5-6 years) at 85% new store productivity (below 90’s+ pre-pandemic tied to higher Densification/denominator effect). Comp Build: Low-single-digit same-store-sales with “core” comps (ex Five Beyond) +0.6% in FY23A/FY24E driven by 8 straight quarters of average basket decline with the annual Five Beyond lift moderating to ~90bps in FY25/26 by our math (versus ~150bps annual lift in FY23/24). Margin Build: Fixed cost leverage at 2.5%-3% comps by our work (noting mgmt’s FY26’s 12% margin target = return to FY18 model despite ~8 years of 4-5% comp store performance)."

For an analyst ratings summary and ratings history on Five Below click here. For more ratings news on Five Below click here.

Shares of Five Below closed at $148.61 yesterday.

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