JPMorgan downgrades Five Below, ups price target. Here's why

JPMorgan analysts downgraded discount retailer Five Below (FIVE) to Underweight while boosting its price target on the stock to $95 per share. Catalysts Madison Mills and Seana Smith report on the analyst note that references Five Below's declining comparable store sales.

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This post was written by Luke Carberry Mogan.

Video Transcript

All right, let's move over to a downgrade.

We are looking at five below, trading down over 3%.

This comes after JP.

Morgan shifted their rating for the discount retailer to underweight from neutral.

They did boost their price target to $95 from $89.

JP.

Morgan, saying the retailers third quarter comp sales through mid September are down in the low digits.

And it's interesting because this comes on the heels of some field work that they did and conversations that they had with management as well.

So this led into their kind of multi year model from JP.

Morgan here.

But coming in at under way, they talked about the waterfall of math that points to five below, lifting their contribution, decreasing in full year 2025 and further in full 2026 as the overall comp base increases each year.

So certainly interesting to watch, given the challenges five below has been experiencing.

You can see there on your screen here today down over 54%.

And in this they also talked about the potential pull forward here of Halloween, a seasonal sales, saying some people that was cited by Michael's people are planning ahead.

Also the anniversary of proactive holiday sales helping pull forward year ago here, given the earlier receipts.

So again, playing into the fact that maybe some of this has already been priced in and that's why they're lowering the rating here of five below.