On Thursday, BofA Securities expert Christopher Nardone updated Levi Strauss & & Co LEVI from Neutral to Purchase ranking and raised the cost projection from $17.00 to $20.00.
The expert mentioned the stock’s 38% drop from in 2015 as an engaging entry point and highlighted Levi’s strong sales patterns, conservative profits assistance, low direct exposure to China, and enhancing wholesale efficiency.
With a strong balance sheet and varied supply chain, the expert raised the cost projection, using an 8x several on financial 2026 EV/EBITDA.
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The expert views LEVI as a standout brand name in unsure times, thanks to its growing worldwide appeal and dominant position in the denim market.
The business is broadening beyond jeans into classifications like gowns, skirts, and outerwear, intending to increase its reach in ladies’s garments.
A collaboration with Beyoncé continues to sustain brand name buzz, while strong direct-to-consumer patterns in essential areas recommend worldwide market share gains.
LEVI provided a strong financial very first quarter, with strong vacation sales driving enhanced profits and margins. Net natural sales leaving out FX, Citizen, shoes, and additional weeks increased 9%, though development tapered as the quarter advanced.
Management restated its 3– 4% yearly development outlook, which the expert consider as mindful. Encouragingly, March patterns rebounded, and the margin trajectory appears well-positioned versus peers anticipating more powerful second-half healings.
LEVI’s wholesale sector is revealing favorable momentum, with 2 straight quarters of U.S. development. In Europe, first-quarter wholesale decreased due to warehouse shifts, however order book strength recommends a go back to development in the 2nd quarter.
LEVI is momentarily gaining from a 90-day tariff reprieve, however the business appears durable if trade stress flare once again, the expert observed.
With minimal direct exposure to China in its production and simply 40% of sales connected to the U.S., LEVI is insulated from substantial interruption.
LEVI’s strong balance sheet is a crucial benefit amidst financial unpredictability. With net take advantage of at simply 0.2 x, the business remains in a far much better position than lots of peers.
This monetary versatility permits LEVI to preserve dividends, continue share buybacks, and reinvest in development placing it well must macro conditions get worse, stated the expert.
Cost Action: LEVI shares closed lower by 2.75% to $14.52 on Thursday.
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