Deutsche Bank analyst Krisztina Katai downgraded Five Below to Hold from Buy with a price target of $79, down from $155. While noting that shares have “meaningfully underperformed,” the firm is stepping to the sidelines given concerns around the abrupt CEO change, deteriorating sales trends, a step down in new store productivity and “less-compelling” merchandising, the analyst tells investors. The firm does not think the business model is broken, and thinks interim CEO Ken Bull knows the operating model very well, but addressing the “self-inflicted issues” could take time, the analyst added.
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