Five Below price target lowered to $210 from $225 at Morgan Stanley

Morgan Stanley lowered the firm’s price target on Five Below to $210 from $225 and keeps an Overweight rating on the shares. The firm was anticipating “relatively weaker” 2024 sales and margin guidance, but what was “unexpected” drove the stock to about $180 were “two factors.” First, the Q1 and full-year comp guidance ranges were below the low-end of the 2%-4% long-term range, driven both by the holiday/calendar comparison and softness at the start of the year, and second, shrink was above expectations for 2023 and 2024 guidance does not embed an improvement in shrink levels, the analyst tells investors. The stock may “tread water in the near-term” until there is better visibility on a comp rebound in the second half and stronger comp and EPS growth into 2025, thought the longer-term story remains intact, the analyst added.