Wells Fargo raised its price target on Five Below to $295 from $260 while maintaining an overweight rating, citing the discount retailer’s stronger-than-expected quarterly performance and improving margins.
Five Below’s shares traded at $243.08 at the time of the report, up from a prior close near $245.08. The stock has delivered a 61% return over the past year, while revenue grew 26% over the trailing twelve months. Wells Fargo applied a 25x earnings multiple to its valuation, resulting in a price-to-earnings ratio of 30.44 and a PEG ratio of 0.46.
The company reported adjusted earnings per share of $1.68 for the second quarter of fiscal 2026, exceeding Wall Street’s estimate of $1.33. Total revenue reached $1.26 billion, topping the $1.21 billion forecast. Comparable sales rose 14%, while customer traffic and transactions increased 13% year-over-year.
Telsey Advisory Group also raised its target to $305 from $280, keeping an Outperform rating. Analysts noted high single-digit unit growth and a significant recovery in margins as key drivers. Eleven analysts revised their earnings estimates upward for the upcoming period, according to InvestingPro data.
Five Below’s results included a $2.33 positive impact from IEEPA tariff refunds, partially offset by a $0.02 negative effect from retention bonuses. The company faces difficult comparisons in fiscal 2027, the report noted.
