JP Morgan initiates Five Below at overweight, sees big income growth as new stores open

Key Points
  • Analyst Matthew Boss initiates coverage at overweight and sets an $87 price target, implying nearly 22 percent upside from Friday's close.
  • "Five Below's new store economics are best-in-class across our coverage at less than a one-year payback period," Boss said in a note Monday.
Five Below store.
John Greim | LightRocket | Getty Images

Five Below is set for years of solid income growth and stock price gains thanks to new store openings, according to J.P. Morgan.

"Five Below's new store economics are best-in-class across our coverage at less than a one-year payback period (and 150 percent return on investment) with three buckets of conservatism embedded in management's current 2,500 store saturation target," analyst Matthew Boss said in a note to clients Monday. "Brand awareness reached 60 percent in markets open at least two-years in November 2017 with same-store-sales strength increasingly diversified."