Credit Suisse Reiterates Outperform Rating, Lowers PT On Five Below As Margin Leverage Is Delayed Again

In a report published Thursday, Credit Suisse analyst Christian Buss reiterated an Outperform rating on Five Below, Inc. (NASDAQ: FIVE), but lowered the price target from $45.00 to $38.00.

In the report, Credit Suisse noted, "Five Below reported 4Q results better than the (negatively) pre-announced range, but guided 2015 below the street as store comps are now targeted at 3% (versus prior long-term targets for 4%) and accelerated investments persist. While the company is guiding to margin expansion in 2016 and beyond, we now believe more moderate expectations are in order with respect to the company's margin profile.

"We lower long-term margin expansion targets from 150bp-plus to 50bp of expansion. As a result we now expect long-term top-line growth to be sustained at 20% with EPS growth of 20-22% (prior 25%-plus.) We maintain our Outperform, but lower our target multiples and target price to $38 from $45."

Five Below closed on Wednesday at $32.22.