Analysts React to Five Below Earnings Beat

Goldman added FIVE to its America's conviction list

Managing Editor
Mar 28, 2019 at 10:03 AM
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Shares of bargain retailer Five Below Inc (NASDAQ:FIVE) are up nearly 7% at $128.15 this morning, after the company reported a fourth-quarter earnings beat. Analysts have been quick to respond, with no fewer than six price-target hikes for FIVE, including to $133 from $132 at Dougherty. In addition, Loop Capital reiterated a "buy" rating and $145 price target, and said Five Below "remains one of our favorite long ideas in our coverage universe, and we believe the stock is increasingly becoming a 'must own' for midcap growth investors in the retail sector." Goldman Sachs also added the equity to its America's conviction list.

For perspective, 11 of the 14 covering analysts following the stock issued a "buy" or better rating coming into today. And although J.P. Morgan Securities trimmed its price-target to $133 from $139, the new target is still in line with FIVE's consensus 12-month price target of $135.11.

Meanwhile, several option buyers are likely cheering today. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), shows that options traders had an extremely high preference for calls over puts of lte. Specifically, FIVE's 10-day call/put volume ratio of 2.25 ranks in the 92nd percentile of its annual range.

From a technical view, Five Below has added roughly 80% year-over-year, and is up 24% in 2019 so far. Following the stock's most recent rejection in the $130-$135 area in February, the stock pulled back, but found support from its 160-day moving average.


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