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UPDATE: Deutsche Bank Initiates Five Below with Buy, $40 PT; Valuation Still Reasonable

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Deutsche Bank Reduces Estimates On Five Below, Still Sees Growth Ahead
Today In SA PRO: Thursday, January 29 (Seeking Alpha)

Deutsche Bank initiated its coverage on Five Below (NASDAQ: FIVE) with a Buy rating and a $40 price target per share.

Deutsche Bank commented, "Few retailers hold the investment attributes that Five exhibits - (1) 25%+ unit growth, (2) HSD/LDD SSS growth led by traffic, (3) sizeable EBIT margin upside with a 4% fixed cost hurdle rate, & (4) a 30% LT EPS CAGR. Even with the stock up ~88% since its IPO on 7/18, we don't think FIVE looks back - see the post IPO performance of DG (Buy, $52.31), GNC (Buy, $38.58), VSI (Hold, $56.49), & TFM (Buy, $60.56) as parallels in our space. Finally, while valuation is the biggest hurdle for most, we're willing to pay up for the growth that lies ahead for the team from Philly."

Five Below closed at $32.51 on Tuesday.

Latest Ratings for FIVE

DateFirmActionFromTo
Jan 2015Deutsche BankMaintainsBuy
Jan 2015Dougherty & CompanyDowngradesBuyNeutral
Jan 2015Deutsche BankMaintainsBuy

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Posted-In: Deutsche BankAnalyst Color Initiation Intraday Update Analyst Ratings

 

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