Is Five Below 1 Of The Only Attractive Risk/Rewards Left In Retail?

The fidget spinning craze and strong first-quarter earnings report pushed Credit Suisse analyst Edward Kelly to keep his Outperform rating and raise his price target to $65 on Five Below Inc FIVE.

What Is Driving The Upside?

Five Below reported a very solid top-line earnings beat, and the notable highlight was management raising guidance between 5 and 8 percent in Q2.

While management did raise guidance, causing some of the upside to potentially be already priced in, Kelly said, “The back half outlook seems conservative given easy comparisons.”

“New store performance was solid, especially management's positive commentary regarding California,” Kelly added. “FIVE remains one of the few attractive growth stories in retail, and we are encouraged by the early 2017 beat and raise.”

Key Risks To Watch Out For

Kelly noted:

• The competitive industry landscape.
• Execution risk especially around their new store roll-out.
• Margin erosion.

To read more up-to-date news on Five Below check out the Benzinga Pro news wire.

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