Wolfe Research singles out Five Below, At Home and Floor & Decor as retail winners (NASDAQ:FIVE)
Wolfe Research launches coverage on Five Below (FIVE +2.9%), Floor & Decor Holdings (FND +2.5%) and At Home Group (HOME +3.2%) with Outperform ratings.
The firms assigns a price target of $150 on FIVE vs. the average Wall Street PT of $136.50. “In our view, FIVE operates one of the most unique traffic-driven models across all of retail with industry leading new unit economics and an agile merchant team helping to deliver consistent positive comp sales growth through an “on trend” product assortment. We see a clear path towards sustained double-digit new store expansion over the next several years.”
The firms assigns a price target of $84 on FND vs. the average Wall Street PT of $76.16. ” FND continues to benefit from a solid housing backdrop and the potential for sustained momentum in the home improvement sector, specifically a structural shift towards hard surface flooring. As one of the rare new unit growth opportunities across retail, FND should further unlock the benefits of scale in coming years to drive operating margins towards a low double-digit rate.”
The firms assigns a price target of $18 on HOME vs. the average Wall Street PT of $20.29. “Q2 results and trends early into Q3 appear as an inflection point in the trajectory of the HOME business model. We view the pullback in shares post Q2 results as an attractive entry point with a risk-reward tilted favorably from here.”
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