Five Below's (FIVE) Q1 results should drive EPS estimates to a base that limits the downside and highlights the upside, UBS said in a note Wednesday. The results are due June 3.
"The key point to consider ahead of this print is that earnings estimates are likely to rise to a level that, even if the outlook dims, the absolute earnings will be high enough that it makes the shares looking compelling," the report said.
The note also pointed to the arrival of "Squishy Dumplings"
product that has brought lines of customers, prompting stores to implement limits on the numbers that customers can purchase.
"It shows that FIVE continues to be well-positioned when a trend like this arises," the report said.
UBS maintained its buy rating and $285 price target.
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