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Five Below Declines After Getting Barclays Downgrade

Tony Owusu

shares were falling Monday after analysts at Barclays downgraded the stock to equal weight from underweight despite the firm's view that Five Below is the best specialty retail stock in its class. Barclays analyst Karen Short explained this by saying that to justify an overweight rating Five Below would have to have a $165 price target, which Barclays isn't prepared to give it. Furthermore, the FIVE model is highly differentiated and defensible vs. Amazon, while the visible unit growth opportunity (~20% unit growth) matched with top tier return metrics (ROIC ~18%, less than 1 year payback period on new units) still warrant best-in-class status," Short wrote.