Five Below pops after Wall Street gives the discount retailer another green light

Five Below shares climbed over 4% Tuesday afternoon after Loop Capital bumped its rating on the stock from “hold” to “buy” and lifted its price target to $165 from $130 — about a 20% leap from current trading levels. It marks Loop Capital’s second upgrade for the chain this summer, after lifting its price target to $130 from $90 in June.

The upgrade comes on the heels of Five Below’s strong Q1 results in June as well as a fresh partnership with Uber Eats. Analysts at Loop Capital cited sharper merchandising, refreshed marketing, tighter inventory control, and pricing changes as core drivers, even as the broader retail space stays choppy.

It’s the latest sign of growing optimism around the retailer: UBS reiterated its “buy” rating on the stock in June and also lifted its price target to $160 from $110. In April, JPMorgan upgraded its outlook on the stock from “underweight” to “neutral.”

Five Below shares are up over 38% year to date.