Wells Fargo lifts Levi Strauss stock rating, raises target to $20

Published 30/04/2025, 11:34
© Reuters

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.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.