Oliver Chen, an analyst from TD Cowen, maintained the Buy rating on Levi Strauss & Co (LEVI – Research Report). The associated price target was lowered to $17.00.
Oliver Chen has given his Buy rating due to a combination of factors including Levi Strauss & Co’s strong financial performance and strategic positioning. The company demonstrated a robust 9% organic growth across various segments and channels, with notable increases in the Americas and Asia. Additionally, Levi’s exceeded earnings expectations, with an EPS of 38 cents compared to the anticipated 25 cents, and improved gross margins, indicating effective pricing and sales strategies.
Chen also highlights Levi’s modest valuation at 10 times the forward P/E ratio, which is attractive given the recent pullback. The company’s solid balance sheet, with low leverage, supports its financial stability. Furthermore, Levi’s global growth, premium denim market leadership, and focus on direct-to-consumer and fashion segments are seen as positive drivers. Chen notes that while inventory management improvements are needed, the company’s efforts to simplify product lines are promising for future margin and inventory management enhancements.
In another report released today, J.P. Morgan also upgraded the stock to a Buy with a $17.00 price target.