Why Five Below Stock Could See Higher Highs

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Five Below (FIVE) is on fire.

On July 13, we said, “Five Below (FIVE) is starting to push higher after UBS upgraded the stock to a buy rating.  FIVE last traded at $121.09 and could push higher, as well. All as discount retailers become far more appealing with inflation.”

At the moment, the stock is up to $184.57 and screaming higher.

All thanks to Americans that got fed up with sky-high inflation, and strong earnings.  In fact, in its most recent quarter, the company said net sales were up 6.2% to $645 million from $607.6 million year over year.  While same-store sales were down 2.7%, that was better than forecasts for a drop of 7.8%.  Better, the company boosted its profit forecast to between $2.97 and $3.02 a share, with expected sales of just over $3 billion.

“We had a better-than-expected third quarter and are off to a good start for the fourth quarter. It remains a dynamic economic environment. However, Five Below is a resilient retailer,” CEO Joel Anderson told investors. “Our goal, especially this holiday inflation-induced season, is to drive even more value for our customers, and we will continue to selectively pursue opportunistic buys that will drive traffic and attract new customers to Five Below.”

Helping, KeyBanc Capital Markets analyst Bradley Thomas raised his price target to $188 per share, following the earnings report. “As such, we believe FIVE remains one of the most compelling growth opportunities in retailing as we look out long-term,” he added. “With the ability to triple its store fleet, we see FIVE as a retailer with among the most favorable growth profiles in our coverage,” he said, as quoted by The Street.