Key Takeaways
- Jefferies reduced Levi Strauss (LEVI) price target from $27 to $25 while maintaining its Buy rating.
- Stifel trimmed its price objective from $28 to $27, also maintaining a Buy rating amid revenue uncertainty.
- Shares currently trade at $19.70, reflecting a 0.25% decline for the session.
- The company reports quarterly results in six days, with UBS projecting Q3 EPS at $0.36.
- A recent cybersecurity breach involving unauthorized file access was disclosed by the company.
Shares of Levi Strauss & Co. (LEVI) are trading at $19.70 in today’s session, reflecting a 0.25% decline. The stock is drawing attention this week as two prominent Wall Street firms have adjusted their price expectations downward with earnings just days away.
Jefferies revised its price objective downward to $25 from a previous $27. The investment bank continues to recommend the stock with a Buy rating.
Stifel followed suit with its own adjustment, bringing its target down to $27 from $28. Despite the reduction, the firm retained its Buy recommendation on the shares.
With the quarterly earnings announcement scheduled in six days, both firms are recalibrating their forecasts ahead of the release.
Jefferies anticipates a relatively robust third quarter performance. The bank highlights the company’s impressive gross profit margin of 61.72% as an encouraging metric.
The firm suggests full-year profit guidance may see a slight upward revision. However, revenue projections are likely to remain flat due to persistent inflationary headwinds affecting consumer spending.
Reasons Behind the Downward Revisions
Jefferies identified challenges in the European marketplace along with potential weakness among value-conscious U.S. shoppers. The firm’s proprietary alternative data tracking U.S. sales showed inconsistent patterns.
Stifel’s rationale focuses on distinct concerns. The firm recalibrated its revenue and profit forecasts based on channel intelligence and cotton pricing dynamics expected to impact results through 2027.
Despite the adjustment, Stifel maintains earnings estimates that exceed Wall Street consensus for both 2026 and 2027. The firm’s margin analysis incorporates potential tariff mitigation and enhanced direct-to-consumer profitability.
Stifel views the ongoing denim movement, particularly wide leg silhouettes, as far from exhausted. The firm believes Levi Strauss maintains a competitive advantage given its leadership in this segment.
Feedback from retail partners has been encouraging, according to Stifel. However, alternative sales data presents a more cautious picture, which the firm attributes to broader economic uncertainty and increased competition for discretionary spending.
Stock Valuation and Profit Outlook
Levi Strauss shares are currently valued at 12.5 times projected fiscal 2026 earnings. This represents a discount compared to the lifestyle apparel sector median of 14.3 times calendar 2026 estimates.
Stifel’s revised $27 price target implies a valuation of 15.5 times its fiscal 2027 earnings forecast of $1.74 per share. For context, the consensus estimate for that period stands at $1.71.
UBS has taken a more optimistic stance, maintaining both its Buy rating and $34 price objective. The firm anticipates third quarter earnings of $0.36 per share, matching consensus expectations.
UBS also projects a more favorable revenue trajectory that could support an upward revision to the company’s full fiscal 2026 earnings guidance. This outlook is notably more constructive than the assessments from Jefferies and Stifel.
Jefferies also acknowledged the appointment of a new chief financial officer at the organization. The firm interprets this leadership change as evidence of ongoing commitment to international expansion.
The investment bank views the fourth quarter as a critical period for evaluating operating margin performance. It anticipates revenue expansion in the mid-single digit range or better as the company moves into 2027.
In unrelated developments, Levi Strauss acknowledged a cybersecurity breach earlier this month. The company disclosed that unauthorized individuals gained access to internal documents using social engineering techniques.
According to the company’s statement, no customer information was compromised in the incident. External cybersecurity specialists have been engaged to conduct a comprehensive investigation.
The board of directors also experienced a recent change. Robert Eckert stepped down after reaching the company’s mandatory retirement threshold, with the departure unrelated to any governance disputes.
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