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UPDATE: Sterne Agee Initiates Five Below With Neutral on Positive Differentiating Factors

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In a report published Wednesday, analysts from Sterne Agee initiated coverage on Five Below (NASDAQ: FIVE) with a Neutral rating and $39.00 price target.

In the report, lead analyst Charles Grom commented that, "FIVE's execution is strong with a few underlying principles: (1) a value-oriented retailer focused on name brands at a value (all items under $5); (2) sizeable store growth ahead with a potential to see almost a ten-fold increase; (3) an impressive new store model with a 1-year payback/returns greater than 100%; (4) traffic led MSD-HSD comp story; and (5) respectable EBIT margin growth ahead with a 4% fixed cost hurdle rate. As a result, FIVE compares favorably vs. its dollar store peers – FDO, DG, DLTR, and FRED – across several metrics, including (a) sales productivity (~$256/peer avg. of $200); (b) inventory turns (6.0x/5.2x); & (c) EBIT margins (11.6%/peer avg. of 8.0%)."

Five Below closed on Wednesday at $37.11.

Latest Ratings for FIVE

DateFirmActionFromTo
Dec 2016Loop CapitalInitiates Coverage OnBuy
Oct 2016Longbow ResearchInitiates Coverage OnBuy
Oct 2016KeyBancInitiates Coverage OnOverweight

View More Analyst Ratings for FIVE
View the Latest Analyst Ratings

Posted-In: Charles Grom Sterne AgeeAnalyst Color Initiation Analyst Ratings

 

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