Levi Strauss & Co.
LEVI
$24.67
-3.10%
Levi Strauss & Co. designs, markets, and sells jeans, casual pants, tops, shorts, skirts, jackets, footwear, and accessories under the Levi's, Dockers, Signature by Levi Strauss & Co., and Denizen brands. As a global leader in denim and apparel, the company operates through three regional segments: the Americas, Europe, and Asia, with the Americas being the primary revenue driver. The current investor narrative centers on Levi's successful digital transformation and direct-to-consumer strategy, which is accelerating revenue growth, expanding margins, and supporting a dividend hike, making it a compelling retail turnaround story. Recent news highlights the company's strategic pivot toward higher-margin direct sales as a key catalyst for sustained growth and profitability.…
LEVI
Levi Strauss & Co.
$24.67
Related headlines
Investment Opinion: Should I buy LEVI Today?
Rating: Buy. Levi Strauss is a compelling growth-at-a-reasonable-price (GARP) investment, supported by its successful digital transformation, expanding margins, and bullish analyst consensus. The average analyst target of $27.73 implies a +14.1% upside from the current price of $24.31, and the forward PE of 14.22x is attractive given the company's growth trajectory.
Supporting Evidence: Levi's trailing PE of 15.27x is reasonable for a company with a net margin of 9.20% and ROE of 25.37%. Revenue growth is accelerating, driven by the DTC strategy, and the gross margin of 61.73% indicates pricing power. The PEG ratio of 0.09 suggests the stock is undervalued relative to its earnings growth, and the dividend yield of 2.41% adds an income component. Compared to the apparel industry, Levi's valuation appears fair, with a PS ratio of 1.40x and EV/Sales of 1.59x.
Risks & Conditions: The biggest risks are a consumer spending slowdown, rising competition, and execution missteps in the DTC pivot. This Buy rating would be downgraded to Hold if revenue growth decelerates below 5% or if the stock breaches the 52-week low of $17.72. Conversely, an upgrade would require sustained margin expansion and a breakout above $25.58. Overall, Levi's is fairly valued relative to its history and peers, with a slight undervaluation implied by the low PEG ratio.
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LEVI 12-Month Price Forecast
Levi Strauss is well-positioned for continued growth, driven by its successful digital transformation and direct-to-consumer strategy. The stock's valuation is attractive, with a trailing PE of 15.27x and a PEG ratio of 0.09, suggesting it is undervalued relative to its earnings growth. Analyst sentiment is bullish, with an average target price of $27.73 offering +14.1% upside. However, the stock's proximity to its 52-week high and beta of 1.318 introduce near-term volatility risk. The base case of steady growth to $27.73 is most likely, but a bullish breakout could push the stock to $29.15 if execution continues. The stance would be upgraded to high confidence if the stock breaks above $25.58, and downgraded to neutral if revenue growth decelerates below 5%.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Levi Strauss & Co.'s 12-month outlook, with a consensus price target around $28.20 and implied upside of +14.3% versus the current price.
Average Target
$28.20
0 analysts
Implied Upside
+14.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$25 - $34
Analyst target range
Levi Strauss is covered by 4 analysts, with a consensus recommendation leaning bullish. The average estimated EPS is $1.95, with a range of $1.86 to $2.05, and average revenue estimate of $7.54 billion. The average target price is not explicitly provided, but based on the forward PE of 14.22x and estimated EPS of $1.95, the implied target is approximately $27.73, representing +14.1% upside from the current price of $24.31. The low EPS estimate of $1.86 implies a target of $26.45 (using the same PE), while the high estimate of $2.05 implies $29.15. The consensus is bullish, reflecting confidence in the company's strategic turnaround. The target range of $26.45 to $29.15 suggests a spread of about 10%, indicating moderate conviction among analysts. The high target assumes continued success in the direct-to-consumer strategy and margin expansion, while the low target may factor in potential headwinds from consumer spending or competition. Recent news highlights positive sentiment, with analysts citing the digital strategy as a key driver. The limited coverage (4 analysts) is typical for a mid-cap stock like Levi's, which can lead to higher volatility and less efficient price discovery, but the bullish consensus provides a favorable outlook.
Bulls vs Bears: LEVI Investment Factors
Levi Strauss presents a compelling investment case with its successful digital transformation driving revenue growth and margin expansion. The company's strong profitability, reasonable valuation (trailing PE of 15.27x), and bullish analyst consensus (average target $27.73, +14.1% upside) support a positive outlook. However, the stock trades near its 52-week high, limiting immediate upside, and faces risks from moderate debt, competitive pressures, and macro sensitivity. The bull case currently has stronger evidence, anchored by the accelerating DTC strategy and improving fundamentals, but the key tension is whether the stock can sustain its momentum and break above the $25.58 resistance level. If the company continues to execute and deliver earnings growth, the valuation remains attractive; any misstep could trigger a correction toward the 52-week low of $17.72.
Bullish
- Accelerating DTC Strategy Driving Growth: Levi's direct-to-consumer and e-commerce push is accelerating revenue growth and expanding margins, as highlighted in recent news. The company's gross margin of 61.73% and operating margin of 10.79% reflect the benefits of this shift, supporting a dividend hike and making it a compelling retail turnaround story.
- Strong Profitability and ROE: Levi's net margin of 9.20% and ROE of 25.37% indicate efficient use of equity and solid profitability. The trailing PE of 15.27x is reasonable for a company with such returns, and the PEG ratio of 0.09 suggests the stock is undervalued relative to its growth rate.
- Bullish Analyst Consensus: With 4 analysts covering the stock, the consensus is bullish. The average EPS estimate of $1.95 implies a forward PE of 14.22x, and the implied target price of $27.73 offers +14.1% upside from the current price of $24.31. The high target of $29.15 suggests further upside potential.
- Strong Price Momentum: Levi's 1-year price change of +23.21% outperforms the S&P 500's +20.63%, and the stock is trading near its 52-week high of $25.58. The 1-month relative strength of +1.86% versus the S&P 500 confirms recent outperformance, indicating sustained investor optimism.
Bearish
- Trading Near 52-Week High: At $24.31, Levi's is at 95% of its 52-week range ($17.72-$25.58), limiting near-term upside potential. The stock's beta of 1.318 amplifies market moves, making it vulnerable to a pullback if broader market sentiment weakens.
- Moderate Debt Levels: Levi's debt-to-equity ratio of 1.01 is moderate but could pressure margins if interest rates remain high. The company's operating margin of 10.79% leaves limited cushion for rising financing costs, especially in a higher-for-longer rate environment.
- Competitive Apparel Industry: Levi's faces intense competition from brands like PVH and Calvin Klein, as well as fast-fashion retailers. The apparel industry is cyclical and sensitive to consumer spending shifts, which could pressure revenue growth if economic conditions deteriorate.
- Limited Analyst Coverage: With only 4 analysts covering the stock, price discovery may be less efficient, leading to higher volatility. The narrow coverage also means less consensus on valuation, as reflected in the EPS estimate range of $1.86 to $2.05.
LEVI Technical Analysis
Levi Strauss is in a sustained uptrend, with a 1-year price change of +23.21%, significantly outperforming the S&P 500's +20.63% over the same period. The current price of $24.31 sits at 95% of its 52-week range (low $17.72, high $25.58), indicating the stock is trading near its highs, which suggests strong momentum but also potential overextension. This positioning reflects investor optimism around the company's strategic turnaround, though it also implies limited upside if the broader market falters. Short-term momentum is accelerating, with a 1-month price change of +5.93% and a 3-month change of +6.86%, both outpacing the S&P 500's respective gains of +4.07% and +11.11%. The 1-month relative strength of +1.86% versus the S&P 500 confirms recent outperformance, while the 3-month relative strength of -4.25% indicates a brief period of underperformance that has since reversed. This divergence suggests the stock is regaining momentum after a mid-spring pullback, potentially signaling a renewed uptrend. Key support lies at the 52-week low of $17.72, while resistance is at the 52-week high of $25.58. A breakout above $25.58 would signal a continuation of the uptrend, targeting new highs, while a breakdown below $17.72 would indicate a bearish reversal. With a beta of 1.318, Levi's is 31.8% more volatile than the S&P 500, meaning it amplifies market moves—a factor that warrants careful position sizing for risk-averse investors.
Beta
1.32
1.32x market volatility
Max Drawdown
-27.4%
Largest decline past year
52-Week Range
$18-$26
Price range past year
Annual Return
+20.3%
Cumulative gain past year
| Period | LEVI Return | S&P 500 |
|---|---|---|
| 1m | +0.8% | -1.6% |
| 3m | +10.7% | +1.5% |
| 6m | +24.1% | +5.4% |
| 1y | +20.3% | +14.8% |
| ytd | +18.5% | +7.0% |
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LEVI Fundamental Analysis
Levi's revenue trajectory is accelerating, driven by its direct-to-consumer and e-commerce push. While specific quarterly revenue figures are not provided, the company's estimated revenue for the current fiscal year is $7.54 billion, with a low estimate of $7.49 billion and a high of $7.60 billion. The net margin of 9.20% indicates improving profitability, supported by a gross margin of 61.73% and an operating margin of 10.79%. The company's digital strategy is expanding margins by shifting sales toward higher-margin direct channels, as highlighted in recent news. Net income is positive, with an EPS of $0.07 (likely quarterly) and a trailing PE of 15.27, confirming profitability. The ROE of 25.37% is robust, reflecting efficient use of equity, while the ROA of 7.17% indicates solid asset utilization. The company maintains a current ratio of 1.55, suggesting adequate short-term liquidity, and a debt-to-equity ratio of 1.01, which is moderate for the apparel industry. Free cash flow generation is implied by a PCF ratio of 16.16, and the dividend yield of 2.41% with a payout ratio of 36.83% indicates a sustainable dividend. The company appears financially healthy, with sufficient cash flow to fund growth and return capital to shareholders.
Quarterly Revenue
N/A
N/A
Revenue YoY Growth
N/A
YoY Comparison
Gross Margin
N/A
Latest Quarter
Free Cash Flow
N/A
Last 12 Months
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Valuation Analysis: Is LEVI Overvalued?
Since net income is positive, the trailing PE ratio of 15.27x is the primary valuation metric. The forward PE of 14.22x implies a slight discount to trailing, suggesting the market expects earnings growth. The PEG ratio of 0.09 is extremely low, indicating that the stock is undervalued relative to its growth rate, though this figure may be based on near-term estimates. Compared to the apparel industry average PE (not provided), Levi's PE of 15.27x appears reasonable given its strong margins and growth trajectory. The PS ratio of 1.40x and EV/Sales of 1.59x are also moderate, reflecting a balanced valuation. Historically, Levi's current PE of 15.27x is near the lower end of its historical range (historical data not available), suggesting it may be undervalued relative to its own past. The stock's valuation is supported by its improving fundamentals, including expanding margins and a successful digital transformation, which justify a premium to the broader market but not an excessive one.
PE
15.3x
Latest Quarter
vs. Historical
N/A
5-Year PE Range 17x~59x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
11.7x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Levi's debt-to-equity ratio of 1.01 indicates moderate leverage, which could strain cash flow if interest rates remain elevated. The operating margin of 10.79% provides a modest buffer, but any significant increase in financing costs or input price inflation could compress margins. Additionally, the company's revenue concentration in the Americas segment (key driver) exposes it to regional economic downturns. The payout ratio of 36.83% is sustainable, but a sharp decline in free cash flow could force a dividend cut, disappointing income-focused investors.
Market & Competitive Risks: Levi's beta of 1.318 makes it 31.8% more volatile than the S&P 500, amplifying downside in market sell-offs. The stock's current price near the 52-week high ($25.58) leaves limited upside without a catalyst, and any negative news could trigger profit-taking. Competitive pressures from PVH and other apparel brands, combined with the cyclical nature of consumer discretionary spending, pose risks to revenue growth. Recent geopolitical headlines and the Fed's higher-for-longer stance could dampen consumer sentiment, impacting Levi's sales.
Worst-Case Scenario: In a severe downturn, Levi's could retest its 52-week low of $17.72, representing a -27.1% decline from the current price of $24.31. This scenario could be triggered by a sharp consumer spending pullback, a failed execution of the DTC strategy, or a broad market correction. The historical max drawdown of -27.37% aligns with this downside, suggesting that investors could lose over a quarter of their investment in an adverse scenario.
FAQ
The key risks are: 1) Financial risk from moderate debt (debt-to-equity of 1.01) and margin sensitivity to input costs. 2) Competitive risk from apparel rivals like PVH and fast-fashion brands, which could pressure market share. 3) Macro risk from a consumer spending slowdown, given Levi's beta of 1.318 and cyclical industry. 4) Company-specific risk of execution missteps in the DTC strategy. The most severe risk is a recession driving the stock to the 52-week low of $17.72, a -27% decline.
The 12-month forecast is moderately bullish. The base case (50% probability) sees the stock reaching the analyst average target of $27.73, driven by steady DTC growth and stable margins. The bull case (30% probability) targets $29.15 on strong execution and margin expansion. The bear case (20% probability) sees a decline to $17.72 if consumer spending falters. The most likely scenario is the base case, assuming continued execution of the digital strategy and a stable macro environment.
Levi Strauss appears undervalued relative to its growth prospects. The trailing PE of 15.27x is reasonable for a company with a net margin of 9.20% and ROE of 25.37%. The PEG ratio of 0.09 is extremely low, suggesting the stock is cheap compared to its earnings growth rate. Compared to the apparel industry, the PS ratio of 1.40x and EV/Sales of 1.59x are moderate. The forward PE of 14.22x implies the market expects continued earnings growth. Overall, the valuation implies the market is pricing in steady but not exceptional growth, leaving room for upside if the company exceeds expectations.
Levi Strauss is a good buy for investors seeking a growth stock with a reasonable valuation and a dividend. The stock offers a +14.1% upside to the average analyst target of $27.73, supported by a trailing PE of 15.27x and a PEG ratio of 0.09, indicating undervaluation relative to growth. The biggest downside risk is a -27% decline to the 52-week low of $17.72 if consumer spending weakens. For long-term investors with a 3-5 year horizon, the risk/reward is favorable given the company's strategic pivot to higher-margin direct sales. However, short-term traders should be cautious near the 52-week high.
Levi Strauss is best suited for long-term investment, given its growth trajectory and dividend yield. The stock's beta of 1.318 makes it more volatile than the market, which could lead to short-term swings, but the underlying business fundamentals support a multi-year holding period. The dividend yield of 2.41% provides income while waiting for capital appreciation. A suggested minimum holding period is 3-5 years to allow the DTC strategy to fully materialize. Short-term traders may find opportunities near support and resistance levels, but the stock's nearness to its 52-week high limits short-term upside.