BofA Securities has upgraded Five Below (NASDAQ:FIVE) from Underperform to Buy and lifted its price target to $233 from $158. The investment bank’s move, announced Wednesday, rests on an expectation that a new management team will drive operational improvement and warrant a higher valuation multiple.
The discount retailer was trading at $196.73 at the time of the report and carries a market capitalization of $10.85 billion. Its shares have climbed 108.73% over the last year and are trading close to a 52-week high of $205.22, with a current price-to-earnings ratio of 35.16 based on available data.
Valuation framework
BofA analyst Robert Ohmes derived the new $233 target by applying a 30 times multiple to the firm’s fiscal 2028/calendar 2027 earnings per share estimate of $7.75. That multiple represents an increase from the bank’s prior basis of 24 times fiscal 2027/calendar 2026 EPS. BofA also noted that the company currently trades at roughly 25 times projected calendar 2027 EPS, and the bank expects the stock to revert to a higher multiple as results improve under the new leadership.
Leadership and strategic emphasis
The upgrade follows a series of executive hires that BofA identified as pivotal. CEO Winnie Park joined the company in December 2024. Later additions include CFO Dan Sullivan and Chief Merchant Michelle Israel, who both joined in October 2025. BofA highlighted the management changes as central to its improved outlook.
As part of the strategic recalibration, BofA specifically pointed to the company refocusing on children and the Millennial Mom demographic rather than preteens and teens. The bank cited that shift as an important factor supporting its more optimistic assessment.
Analyst activity and market signals
The BofA action comes amid a wave of upward price-target revisions from other brokerages. UBS increased its target to $255 from $210 and maintained a Buy recommendation, noting a 14.5% comparable sales increase in the fourth quarter. Truist Securities raised its target to $236 from $223, attributing the change to robust holiday sales and effective marketing. Guggenheim set a target of $225, referencing the company’s strongest holiday performance in its history. Craig-Hallum moved its target to $240 from $225 based on projected EPS growth for fiscal 2027. Goldman Sachs left its target at $231, pointing to potential growth tied to movie licensing opportunities in 2026.
Collectively, these broker notes reflect a consensus of improved near-term momentum and heightened expectations for Five Below’s sales and earnings trajectory.
Market context and investor implications
Investors will likely view BofA’s upgrade and the broader cluster of raised targets as confirmation that several sell-side firms expect the retailer to convert recent strength into sustained improvement. BofA’s valuation move, in particular, signals a view that earnings growth combined with strategic execution could justify a materially higher multiple than current market pricing.
Bottom line
BofA’s upgrade to Buy and the adjusted $233 price target rest on a mix of leadership turnover, a targeted merchandising focus, and an earnings estimate of $7.75 for fiscal 2028/calendar 2027. Multiple other brokerages have also moved higher on price targets following sturdy holiday results and company-specific catalysts cited in their reports.