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Bank of America has growing confidence that Five Below ‘s new leadership, merchandising changes and marketing investments could drive further upside for its stock. The bank double upgraded shares of the discount retail chain to a buy from underperform. Analyst Ronald Ohmes also hiked his price target to $233 from $158. Shares of Five Below have surged 109% over the past 12 months. Ohmes’ revised forecast implies an additional upside of 18%. FIVE 1Y mountain FIVE 1Y chart As a catalyst, Ohmes applauded Five Below’s new management team, which he says could drive multiples higher. “We believe FIVE will return to a higher P/E multiple (vs. current 25x P/E on C27E EPS) as results continue to improve under new leadership (new CEO Winnie Park joined in Dec. 2024, followed by new CFO Dan Sullivan and Chief Merchant Michelle Israel joining in Oct. 2025), with a return to a focus on Kid’s and the Millennial Mom (vs. preteens & Teens),” he wrote. Five Below has shifted to a more “merchant led” organization that could drive upside for years to come, Ohmes said. He explained that the company has freshened up its product pipeline, which has provided customers with a sense of “newness.” It also has more core and rounded price points and new “extreme value” items priced above $5 such as fitness items and apparel, he said. Investment in store labor has also driven better cleanliness and inventory flow, according to the analyst. Ohmes also applauded the company’s enhanced seasonal and studio license merchandising, which includes products geared towards specific holidays and a closer relationship with companies like Disney, Marvel, Barbie and Netflix. Five Below has also slowed its store growth to 9% from 15%, which should result in improved site selection and execution, the analyst said. Also, new marketing initiatives will be a tailwind for the stock, Ohmes said. “Investing in marketing drives traffic/transactions and mix shift to higher price points supports [average unit retail] that could result in same-store sales upside for years,” he wrote.
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