Levi Strauss Could Present a Great Buying Opportunity Following Earnings Decline
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6d ago
0mins
Should l Buy LEVI?
Source: Marketbeat
Earnings Report Overview: Levi Strauss reported a double beat in its fourth-quarter earnings, with adjusted earnings per share (EPS) at 41 cents, exceeding analyst expectations, and revenue of $1.77 billion, surpassing forecasts.
Future Projections: The company anticipates revenue growth of 5% to 6% for 2026, but its EPS guidance of $1.40 to $1.46 falls short of analysts' expectations for a 9.45% growth.
Market Challenges: Levi's faces challenges from tariffs impacting its business, but it aims to offset these through pricing power with vendors and lower cotton prices.
Super Bowl Marketing Opportunity: Levi's will debut its first Super Bowl commercial in 20 years, potentially boosting brand visibility and sales, especially as the event will take place at Levi's Stadium.
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Analyst Views on LEVI
Wall Street analysts forecast LEVI stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for LEVI is 26.50 USD with a low forecast of 26.00 USD and a high forecast of 27.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
4 Analyst Rating
4 Buy
0 Hold
0 Sell
Strong Buy
Current: 19.930
Low
26.00
Averages
26.50
High
27.00
Current: 19.930
Low
26.00
Averages
26.50
High
27.00
About LEVI
Levi Strauss & Co. is an apparel company. The Company designs and markets jeans, casual wear and related accessories for men, women and children under the Levi's, Levi Strauss Signature, Denizen, Dockers and Beyond Yoga brands. The Company operates through three geographical segments: Americas, Europe, and Asia. It designs, markets and sells directly or through third parties and licensee's products that include jeans, casual and dress pants, tops, shorts, skirts, dresses, jackets, footwear, and related accessories for men, women and children around the world. The Company’s products are sold in more than 120 countries worldwide through a combination of chain retailers, department stores, online sites, and a global footprint of approximately 3,400 retail stores and shop-in-shops. Outside the United States, department stores, specialty retailers, franchised or other brand-dedicated stores and shop-in-shops are its primary distribution channels.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Sales Growth Highlights: Notably, tops account for 29% of sales and the women's business represents 39%, with growth in these segments poised to support Levi's double-digit growth and solidify its position as a lifestyle brand.
- Price Target Set: Jefferies analyst Blake Anderson has set a price target of $25 for Levi, reflecting confidence in its future growth potential, which is likely to attract more investor interest.
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Levi Strauss Could Present a Great Buying Opportunity Following Earnings Decline
Earnings Report Overview: Levi Strauss reported a double beat in its fourth-quarter earnings, with adjusted earnings per share (EPS) at 41 cents, exceeding analyst expectations, and revenue of $1.77 billion, surpassing forecasts.
Future Projections: The company anticipates revenue growth of 5% to 6% for 2026, but its EPS guidance of $1.40 to $1.46 falls short of analysts' expectations for a 9.45% growth.
Market Challenges: Levi's faces challenges from tariffs impacting its business, but it aims to offset these through pricing power with vendors and lower cotton prices.
Super Bowl Marketing Opportunity: Levi's will debut its first Super Bowl commercial in 20 years, potentially boosting brand visibility and sales, especially as the event will take place at Levi's Stadium.
See More
Levi Strauss Reports Decline in Q4 Profit
- Profit Decline: Levi Strauss reported a Q4 net profit of $158 million, or $0.40 per share, down from $182.5 million and $0.46 per share last year, indicating pressure on the company's profitability.
- Adjusted Earnings: Excluding items, Levi's adjusted earnings were $162.9 million, or $0.41 per share, showing slight improvement but failing to offset the overall profit decline.
- Revenue Growth: The company's revenue rose 0.9% year-over-year to $1.765 billion, slightly above last year's $1.749 billion, indicating stability in sales but not significantly boosting profit growth.
- Market Reaction: Despite revenue growth, the profit decline may impact investor confidence, prompting Levi Strauss to implement measures to enhance profitability in response to future market challenges.
See More
2016 Nostalgia Sparks Retail Revival Potential
- Social Media Surge: Since January 1, user-generated '2016' playlists on Spotify have surged by 790%, indicating a strong nostalgic sentiment among young consumers that could drive sales for brands associated with that era.
- Return to Brick-and-Mortar: Young consumers are rediscovering the joy of in-store shopping, reflecting a longing for the carefree atmosphere of 2016, which may lead to improved performance for retailers.
- Brand Opportunities: Brands like Abercrombie & Fitch could leverage this nostalgia wave to reshape their image, particularly if they successfully distance themselves from past controversies, potentially attracting more young consumers.
- Market Outlook: Retail trends typically last about 18 months, and this nostalgia cycle is expected to persist through the midterm elections this year, possibly extending into next year, providing long-term market opportunities for related brands.
See More
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- Nostalgia Trend Emergence: Gen Z's nostalgia for 2016 has rapidly spread across social media, with Spotify user-generated '2016' playlists soaring by 790% since January 1, indicating a strong yearning for the cultural elements of that time, potentially driving a revival for related brands.
- Return to Brick-and-Mortar: Young consumers are rediscovering the appeal of in-store shopping after years dominated by e-commerce, reflecting a longing for the carefree and familiar comfort of 2016, which could stimulate a retail resurgence.
- Brand Opportunities Arise: Brands like Abercrombie & Fitch and Levi Strauss, which held significant cultural relevance in 2016, may leverage this nostalgia wave to regain market traction, especially as consumers show renewed interest in classic styles.
- Market Strategy Adjustments: As nostalgia rises, brands must adjust their market strategies to align with Gen Z's desire for authenticity and less intentionality, with successful brands likely to harness this emotional connection to reshape their cultural relevance.
See More
Jefferies Initiates Buy Rating on Levi Strauss & Co.
- Direct-to-Consumer Transformation: Levi Strauss (LEVI) is enhancing its market competitiveness by transforming into a direct-to-consumer model, which provides greater control over pricing, inventory, and innovation, expected to drive future sales growth.
- Sales Growth Highlights: Notably, tops account for 29% of sales and the women's business represents 39%, with growth in these segments poised to support Levi's double-digit growth and solidify its position as a lifestyle brand.
- Price Target Set: Jefferies analyst Blake Anderson has set a price target of $25 for Levi, reflecting confidence in its future growth potential, which is likely to attract more investor interest.
- Stock Price Surge: Following Jefferies' Buy rating, Levi's stock price surged 4.6% on Wednesday, closing at $20.32, indicating a positive market response to its transformation strategy.
See More
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- Broadridge Financial Upgrade: DA Davidson raises Broadridge's rating from hold to buy, arguing that the recent 30% decline in shares presents a buying opportunity, maintaining a price target of $228 as the sell-off is seen as excessive.
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Levi Strauss Could Present a Great Buying Opportunity Following Earnings Decline
Earnings Report Overview: Levi Strauss reported a double beat in its fourth-quarter earnings, with adjusted earnings per share (EPS) at 41 cents, exceeding analyst expectations, and revenue of $1.77 billion, surpassing forecasts.
Future Projections: The company anticipates revenue growth of 5% to 6% for 2026, but its EPS guidance of $1.40 to $1.46 falls short of analysts' expectations for a 9.45% growth.
Market Challenges: Levi's faces challenges from tariffs impacting its business, but it aims to offset these through pricing power with vendors and lower cotton prices.
Super Bowl Marketing Opportunity: Levi's will debut its first Super Bowl commercial in 20 years, potentially boosting brand visibility and sales, especially as the event will take place at Levi's Stadium.
See More
Levi Strauss Reports Decline in Q4 Profit
- Profit Decline: Levi Strauss reported a Q4 net profit of $158 million, or $0.40 per share, down from $182.5 million and $0.46 per share last year, indicating pressure on the company's profitability.
- Adjusted Earnings: Excluding items, Levi's adjusted earnings were $162.9 million, or $0.41 per share, showing slight improvement but failing to offset the overall profit decline.
- Revenue Growth: The company's revenue rose 0.9% year-over-year to $1.765 billion, slightly above last year's $1.749 billion, indicating stability in sales but not significantly boosting profit growth.
- Market Reaction: Despite revenue growth, the profit decline may impact investor confidence, prompting Levi Strauss to implement measures to enhance profitability in response to future market challenges.
See More
