Five Below rises after Jefferies upgrades to 'buy'

Shares of discount retailer Five Below FIVE.O were up about 2.7% at $244.54 in premarket trading after Jefferies upgraded the stock to "buy" from "hold" and raised its price target to $350 from $210, representing a 47% upside to the stock's last close.

The brokerage said Five Below is becoming a more sustainable growth story, driven by improving productivity, strong store expansion, higher comparable sales, and faster earnings growth.

Jefferies said Five Below's merchant-led strategy under CEO Winnie Park is driving steadier product wins and supporting sustainable growth.

"We view this as the start of a multi-year climb rather than a one-off benefit," the brokerage added.

According to LSEG-compiled data, 19 of 27 brokerages rate the stock "buy" or higher, while 8 rate it "hold". The median price target is $260.

As of the previous day's close, the stock was up 26.4% year to date.