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Five Below (NASDAQ:FIVE) shares rose on Monday as Roth MKM analyst David Bellinger hiked his rating on the stock to Buy.
Bellinger highlighted profitability improvements as well as a shift in consumer focus to value as key tailwinds for the company. Additionally, his channel checks suggest stronger comparable sales year over year that could promote a strong guide from management during the company’s March earnings report.
“FIVE is now seeing revenue volumes come back and new unit expansion ramping up, all in tandem with excess costs being trimmed,” Bellinger told clients on Monday. “While we missed the initial move off the bottom in FIVE shares, we still see several legs of upside ahead and expect shares to outperform over the balance of the year. We recommend longer-term oriented investors lean into FIVE and take advantage of any broader market pullbacks.”
He raised his price target to $240 from a prior $180 alongside the upgrade to Buy from Neutral. Shares of Five Below (FIVE) rose 2.19% shortly after the market open on Monday.
Read more on why the stock is a top pick at Barclays.