Stifel reiterates Buy rating on Levi Strauss stock ahead of earnings

Investing.com - Stifel has reiterated its Buy rating and $20.00 price target on Levi Strauss & Co. (NYSE:LEVI) ahead of the company’s upcoming earnings report.

The investment firm sees potential for modest revenue upside and an earnings beat compared to its estimates of $1.36 billion in revenue and $0.13 adjusted earnings per share, which align with consensus expectations of $1.37 billion and $0.13 EPS. InvestingPro analysis indicates the stock is currently trading slightly below its Fair Value, with analysts maintaining targets ranging from $15 to $24.82.

Stifel attributes its positive outlook to Levi’s category relevance and traction with younger consumer segments at higher average selling prices, though it does not expect second-quarter results to trigger changes to the company’s full-year 2025 guidance.

The firm identified key factors affecting Levi’s fiscal 2025 outlook, including favorable foreign exchange developments that could add approximately $115 million to reported revenue at current rates, offset by tariff impacts estimated at $0.05 per share after mitigation efforts.

Stifel’s $20 price target represents 13.3 times its fiscal 2026 earnings estimate of $1.50 per share, with the firm citing a structural mix shift toward higher-value products and channels, along with building visibility to mid-single-digit normalized revenue growth and low-double-digit EPS growth.

In other recent news, Levi Strauss & Co. has announced the sale of its Dockers brand to Authentic Brands Group for $311 million, with the potential to rise to $391 million based on performance. This strategic move is part of Levi’s broader plan to focus on its core business and enhance its direct-to-consumer strategy. The sale is expected to close around July 31, 2025, for U.S. and Canadian operations, with remaining operations finalizing by January 31, 2026. UBS and Stifel have both maintained a Buy rating on Levi’s stock with a $20 price target, viewing the sale as a positive step towards focusing on more profitable segments. Levi plans to use approximately $100 million from the sale for share repurchases, which could enhance future earnings. UBS forecasts an 11% compound annual growth rate in earnings per share from fiscal year 2024 to 2029. Stifel estimates the buyback program will add $0.01 to fiscal year 2025 earnings per share and $0.02 in 2026. These developments reflect Levi’s strategic initiatives to streamline operations and strengthen its core brand.

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