On Thursday, BofA Securities analyst Christopher Nardone upgraded Levi Strauss & Co LEVI from Impartial to Purchase ranking and raised the worth forecast from $17.00 to $20.00.
The analyst cited the inventory’s 38% drop from final yr as a compelling entry level and highlighted Levi’s sturdy gross sales traits, conservative income steering, low publicity to China, and enhancing wholesale efficiency.
With a stable steadiness sheet and diversified provide chain, the analyst raised the worth forecast, making use of an 8x a number of on fiscal 2026 EV/EBITDA.
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The analyst views LEVI as a standout model in unsure instances, because of its rising international attraction and dominant place within the denim market.
The corporate is increasing past denim into classes like attire, skirts, and outerwear, aiming to extend its attain in girls’s attire.
A partnership with Beyoncé continues to gas model buzz, whereas sturdy direct-to-consumer traits in key areas recommend international market share positive factors.
LEVI delivered a powerful fiscal first quarter, with stable vacation gross sales driving improved income and margins. Internet natural gross sales excluding FX, Denizen, footwear, and additional weeks rose 9%, although development tapered because the quarter progressed.
Administration reiterated its 3–4% annual development outlook, which the analyst views as cautious. Encouragingly, March traits rebounded, and the margin trajectory seems well-positioned in opposition to friends forecasting stronger second-half recoveries.
LEVI’s wholesale section is displaying constructive momentum, with two straight quarters of U.S. development. In Europe, first-quarter wholesale declined as a consequence of distribution heart transitions, however order e book energy suggests a return to development within the second quarter.
LEVI is briefly benefiting from a 90-day tariff reprieve, however the firm seems resilient if commerce tensions flare once more, the analyst noticed.
With restricted publicity to China in its manufacturing and simply 40% of gross sales tied to the U.S., LEVI is insulated from vital disruption.
LEVI’s sturdy steadiness sheet is a key benefit amid financial uncertainty. With internet leverage at simply 0.2x, the corporate is in a much better place than many friends.
This monetary flexibility permits LEVI to take care of dividends, proceed share buybacks, and reinvest in development positioning it effectively ought to macro situations worsen, stated the analyst.
Value Motion: LEVI shares closed decrease by 2.75% to $14.52 on Thursday.
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