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On Wednesday, Wells Fargo (NYSE:WFC) analyst Ike Boruchow upgraded Levi Strauss & Co. (NYSE:LEVI) stock rating from Equal Weight to Overweight and increased the price target to $20.00, up from the previous $17.00. Boruchow’s assessment highlights Levi’s advantageous position in the current economic climate, noting the company’s minimal cost of goods sold (COGS) exposure to China, which stands at approximately 1%. Additionally, the analyst points out that Levi Strauss has no single source greater than double-digit percentage dependency. The company’s strong financial position is further evidenced by its healthy current ratio of 1.5x and moderate debt levels, as revealed in InvestingPro’s comprehensive analysis.
The modest estimated impact of adjusted tariffs on COGS, which is about 10.8%, coupled with a negligible pricing demand destruction of only -0.5% due to the company’s strong brand power, were also cited as positive factors. Boruchow emphasized the brand’s accelerating direct-to-consumer (DTC) strength and momentum in the global wholesale business. This operational efficiency is reflected in the company’s robust revenue of $6.4 billion over the last twelve months.
The new price target is based on approximately 16 times the fiscal year 2026 estimated earnings per share (EPS). Wells Fargo’s downside scenario is set at $13, based on around 11 times the EPS on a $1.15 FY26 EPS, which is lower than their current estimate for that year. Conversely, the upside scenario is $22 based on approximately 15 times the $1.45 FY26 EPS, which is higher than the current estimate.
Levi Strauss’s strategic positioning and recent performance have led to this optimistic outlook from Wells Fargo, as the company navigates the macroeconomic environment with relative strength. The revised price target reflects Wells Fargo’s confidence in Levi’s future financial performance.
In other recent news, Levi Strauss & Co. reported a strong financial performance, surpassing expectations with a notable earnings per share (EPS) beat for the first quarter of 2025, as highlighted by UBS. The company achieved an adjusted EPS of $0.38, exceeding Stifel’s estimate of $0.27, driven by effective brand-building strategies and a revenue growth acceleration to 8.6% year-over-year. JPMorgan raised Levi’s stock price target to $18, citing discussions with the company’s executive team and confidence in its strategic initiatives, while maintaining an Overweight rating. UBS also maintained a Buy rating with a $20 target, emphasizing Levi’s robust global supply chain and ongoing brand transformation. Stifel, however, adjusted its price target to $20 from $25, considering potential tariff impacts and consumer spending slowdowns, though it retained a Buy rating. JPMorgan upgraded Levi’s stock to Overweight from Neutral, noting the company’s strong appeal to younger demographics and improved profitability profile. Levi’s diversification in its supply chain, with minimal reliance on China, was noted as a mitigating factor against tariff impacts. These recent developments reflect a mix of optimism and caution among analysts regarding Levi Strauss’s future performance.
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