On Friday, UBS reiterated its Buy rating on shares of Levi Strauss & Co. (NYSE:LEVI), maintaining a price target of $25.00. The stance comes amid observations that the market sentiment towards the denim giant is neither particularly bullish nor bearish at this time. UBS's Quant Team has noted that Levi Strauss had been a short-crowded stock over the last three months, but its crowding score has seen a recent improvement.
The data also indicates a slight decrease in short interest, which has dropped approximately 2 percentage points to 9.4% since the last report. This figure is lower than the Softlines industry group average of 10.9%. The change in short interest suggests a shift in investor sentiment towards the company.
UBS's outlook aligns with the general investor sentiment captured through discussions, which appears to be waiting for an in-line second-quarter result. Investors are also anticipating that Levi Strauss will maintain its fiscal year 2024 earnings per share guidance. The firm's analysis implies that expectations for the upcoming quarterly results are set at a reasonable level.
Levi Strauss & Co. is being watched closely by investors, with the UBS Quant Team's data serving as a key indicator of the stock's performance and investor expectations. As the market awaits the company's second-quarter results, the maintained price target reflects UBS's confidence in the denim manufacturer's steady performance.
In other recent news, Levi Strauss & Co. has been the focus of multiple developments. TD Cowen has raised its price target for the company from $23.00 to $26.00, maintaining a Buy rating as it recognizes Levi's expanding market share in the denim sector.
The firm's outlook suggests Levi's is well-positioned to capitalize on growth opportunities in the coming years. Levi Strauss also announced the appointment of Gianluca Flore as the new executive vice president and chief commercial officer, a move aimed at bolstering the company's direct-to-consumer sales and international presence.
In addition, the company has raised its annual profit forecast, which has been attributed to strategic shifts including cost-cutting measures and a focus on direct-to-customer sales. This strategy has seen direct-to-customer sales make up nearly half of the total revenue for the first quarter.
Stifel, a financial services firm, has responded favorably to these developments, raising its share price target for Levi Strauss to $24. These are among the recent developments for Levi Strauss & Co. as the company continues to navigate the evolving business landscape.
InvestingPro Insights
As we consider UBS's perspective on Levi Strauss & Co. (NYSE:LEVI), InvestingPro data and tips offer additional context for investors. Levi's market capitalization stands at a solid $9.16 billion, and while the company is trading at a high earnings multiple with a P/E ratio of 24.64 for the last twelve months as of Q1 2024, it has demonstrated a strong return over the last year with a 61.16% price total return. This suggests that investors have been recognizing the company's value despite recent market volatility.
From an operational standpoint, Levi Strauss has a gross profit margin of 57.54% for the same period, indicating a robust ability to maintain profitability. Additionally, the company's dividend yield is currently at 2.09%, with a history of raising dividends for five consecutive years, which may appeal to income-focused investors.
For those seeking more strategic insights, InvestingPro offers additional tips, such as the fact that Levi Strauss operates with a moderate level of debt and liquid assets exceed short-term obligations, providing a level of financial stability. Moreover, analysts predict the company will be profitable this year, which might align with UBS's maintained price target and positive outlook.
Investors looking to delve deeper into Levi Strauss's performance and potential can access more InvestingPro Tips at https://www.investing.com/pro/LEVI. With a total of 9 additional tips available, these insights could provide a more comprehensive view of the company's financial health and market position. Don't forget to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, enhancing your investment research capabilities.
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