Levi Strauss & Co.
LEVI
$20.44
-1.02%
Levi Strauss & Co. designs, markets, and sells denim and casual apparel — jeans, pants, tops, shorts, skirts, jackets, footwear, and accessories — under the Levi's, Dockers, Signature by Levi Strauss & Co., and Denizen brands, operating through Americas, Europe, and Asia segments in the global apparel industry. As the inventor of the blue jean and one of the most recognized names in denim, Levi's is a heritage brand leader rather than a disruptor, competing with vertically integrated fast-fashion players and premium denim upstarts while leveraging its brand equity across a roughly 19,000-employee global footprint. The current investor narrative centers on a strategic turnaround built around direct-to-consumer and eCommerce expansion, which management and sell-side commentary credit with driving higher-margin revenue growth, margin expansion, and a dividend increase. Recent Q3 results delivered a significant earnings beat with broad-based revenue growth despite a slight top-line miss, reinforcing the operational-strength thesis, though the stock's weak relative performance over the past year suggests the market remains skeptical about how durable that momentum is against a soft consumer backdrop and tariff-related cost pressure across the apparel sector.…
LEVI
Levi Strauss & Co.
$20.44
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Investment Opinion: Should I buy LEVI Today?
Rating: Hold with a constructive bias. The core thesis is that LEVI is a cheap, cash-generative branded apparel turnaround — 12.28x forward earnings, a 2.41% dividend yield, and a 29.5% consensus upside to the $26.47 average target — but the market's skepticism, reflected in 16.09% three-month underperformance, means the turnaround is not yet proven. The 'buy' consensus (mean rating 1.73 from 15 analysts) anchors a favorable view, but the wide $20-$35 target range argues for patience rather than aggressive accumulation.
Supporting evidence: the stock trades at 15.27x trailing and 12.28x forward earnings, with a 1.40x PS and 11.66x EV/EBITDA — value territory for a brand with a 61.73% gross margin. Revenue is implied at roughly $6.3 billion trailing versus ~$7.39 billion consensus forward, mid-teens growth if achieved, and Q3 delivered an earnings beat with broad-based growth. Net margin of 9.20%, ROE of 25.37%, and a 36.83% payout ratio show profitability and shareholder returns are intact, while the 16.16x price-to-cash-flow ratio confirms cash generation funds the dividend.
Risks and conditions: the biggest threats are a soft Americas consumer, tariff-driven gross margin compression, and the 1.01 debt-to-equity leverage limiting flexibility. This Hold would upgrade to Buy if the stock holds above the $18.70 October low and forward EPS estimates of $1.87 are confirmed or raised, or if the forward PE compresses below 11x on a stable earnings outlook. It would downgrade to Sell if revenue growth decelerates below mid-single digits or gross margin falls below 60%. Verdict: fairly valued to modestly undervalued relative to its own history and the branded-apparel peer set, but not a compelling bargain until the DTC growth story proves durable.
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LEVI 12-Month Price Forecast
LEVI presents a cheap valuation (12.28x forward earnings) against a proven but unconfirmed DTC turnaround, with the sell-side consensus at 'buy' and a 29.5% average upside. The stock's 16.09% three-month decline and -18.78 relative strength versus SPY suggest the market is pricing in execution risk that the analyst community does not fully share. The 1.317 beta and 1.01 debt-to-equity mean the outcome will be amplified, and the wide $20-$35 target range captures the binary nature of the growth debate. I would upgrade to bullish if the holiday quarter confirms gross margin above 61% and forward EPS of $1.87, and downgrade to bearish if revenue growth decelerates or the stock breaks below the $18.70 October low.
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 $26.47 and implied upside of +29.5% versus the current price.
Average Target
$26.47
0 analysts
Implied Upside
+29.5%
vs. current price
Analyst Count
—
covering this stock
Price Range
$20 - $35
Analyst target range
Coverage is solid with 15 analysts, and the consensus recommendation is "buy" with a mean rating of 1.73 on a scale where 1 is Strong Buy and 5 is Strong Sell — a moderately bullish stance that stops short of unanimous conviction. The average target price of $26.47 implies roughly 29.5% upside from the current $20.44, a wide gap that suggests the sell-side sees the recent 16.09% three-month decline as an overreaction rather than a fundamental deterioration. The consensus leans bullish, but the dispersion of opinion is notable and the average target sits above the 52-week high of $25.70, meaning analysts collectively expect the stock to make new highs within their horizon. The target range runs from a low of $20.00 — essentially the current price, implying zero upside — to a high of $35.00, a spread of 75% between the extremes that signals high uncertainty rather than strong conviction. The high target of $35.00 would require roughly 71% upside and likely assumes successful DTC mix shift, margin expansion toward the high end of guidance, and multiple re-rating toward premium branded-apparel levels; the low target of $20.00 effectively prices in flat-to-modest growth with margin compression from tariffs or consumer weakness, and notably sits just below the current price, implying the most bearish analyst sees the stock as fully valued. The wide spread, combined with the stock trading below the average target and the recent earnings beat, suggests analysts are maintaining constructive ratings while acknowledging execution risk; the estimated EPS range of $1.80-$1.95 is tight, indicating revenue and margin estimates are broadly aligned even if price targets are not.
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Bulls vs Bears: LEVI Investment Factors
The bear case currently has stronger near-term evidence: LEVI has underperformed SPY by ~18.8 points over three months, trades 27.37% below its 52-week high, and the most bearish analyst target ($20.00) is below the current price. The bull case rests on a forward PE of 12.28x, a 29.5% consensus upside, and a DTC-driven margin story that produced a Q3 earnings beat. The single most important tension is whether the DTC/eCommerce mix shift can sustain mid-teens revenue growth against a soft Americas consumer and tariff cost pressure — if it can, the forward multiple re-rates sharply; if it cannot, the trailing 15.27x PE offers little downside cushion. The wide $20-$35 target range captures this binary outcome, and the stock's 1.317 beta means the resolution will be amplified in either direction.
Bullish
- Analyst upside of ~29.5%: The 15-analyst consensus is 'buy' with a mean rating of 1.73 and an average target of $26.47, implying roughly 29.5% upside from the $20.44 current price. The average target sits above the 52-week high of $25.70, indicating the sell-side expects new highs within its horizon.
- Forward PE of 12.28x is cheap: The stock trades at 15.27x trailing earnings but only 12.28x forward earnings, a ~20% compression that implies the market expects meaningful EPS growth to $1.87 from the current trailing $0.066. For a branded consumer company with a 61.73% gross margin, that forward multiple is in value territory.
- DTC/eCommerce turnaround driving margins: The direct-to-consumer and eCommerce mix shift is credited with driving higher-margin revenue growth, margin expansion, and a dividend increase. Gross margin of 61.73% and net margin of 9.20% reflect brand pricing power rather than commodity basics economics.
- Q3 earnings beat with broad growth: Q3 delivered a significant earnings beat with broad-based revenue growth despite a slight top-line miss, signaling operational strength. Consensus forward revenue of ~$7.39 billion versus trailing revenue of roughly $6.3 billion implies mid-teens growth if achieved.
Bearish
- Severe relative underperformance: LEVI is down 16.09% over three months and 10.74% over six months, with relative strength of -18.78 versus SPY over three months. The stock is down 3.40% over the past year while SPY gained 15.53%, a ~18.9-point relative gap that shows the market is skeptical of the turnaround.
- Wide analyst target dispersion: Targets range from $20.00 to $35.00, a 75% spread, signaling high uncertainty rather than conviction. The low target of $20.00 sits below the current $20.44 price, meaning the most bearish analyst sees the stock as fully valued.
- Thin operating margin limits cushion: Operating margin of 10.79% against a 61.73% gross margin implies heavy SG&A and DTC infrastructure costs. With tariffs and promotional intensity rising across apparel, there is limited buffer if costs increase or consumer demand softens.
- Leverage and consumer cyclicality: Debt-to-equity of 1.01 means the company is not fully self-funding and remains sensitive to rate and refinancing conditions. The Americas segment, the key revenue driver, faces a soft consumer backdrop, and beta of 1.317 makes the stock ~32% more volatile than the market.
LEVI Technical Analysis
LEVI is in a medium-term downtrend that has partially reversed in recent weeks, with the stock down 3.40% over the past year and trading at roughly 79.5% of its 52-week range (52-week low of $17.72, high of $25.70) at the current $20.44. The 52-week high of $25.70 was set in late July, and the subsequent slide to an October low near $18.70 represents a drawdown of about 27% from that peak, consistent with the reported max drawdown of -27.37%. This positioning — well off the highs but above the lows — suggests a stock in a corrective phase rather than a falling knife, with the recent bounce indicating buyers are defending the high-teens area. Momentum is diverging sharply across timeframes: the stock is up 4.02% over the past month, outperforming SPY by 2.80 percentage points, yet it is down 16.09% over three months and 10.74% over six months, with relative strength of -18.78 versus SPY over three months. That pattern — a violent three-month selloff followed by a one-month stabilization — is characteristic of mean-reversion behavior after an oversold condition rather than a confirmed trend reversal, and the modest YTD decline of 1.83% versus SPY's +11.93% underscores how much ground the stock has lost relative to the market. The most recent session saw a 1.02% pullback to $20.44 from $20.65 on volume of roughly 4.16 million shares, suggesting the bounce is meeting supply near the $20.50-$21.00 zone. Key support sits at the 52-week low of $17.72, with the October swing low near $18.70 as the first line of defense; resistance is anchored at the $25.70 52-week high, with intermediate supply likely around $22.50-$23.00 where the August breakdown occurred. A breakout above $25.70 would signal a full trend reversal and likely require a fundamental catalyst such as a strong holiday-quarter guide, while a breakdown below $17.72 would confirm the downtrend and open deeper downside; with a beta of 1.317, the stock is roughly 32% more volatile than the market, so position sizing should account for amplified moves in both directions, and the 3.62 short ratio indicates short sellers are not aggressively pressing the name.
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
-3.4%
Cumulative gain past year
| Period | LEVI Return | S&P 500 |
|---|---|---|
| 1m | +4.0% | +0.2% |
| 3m | -16.1% | +2.9% |
| 6m | -10.7% | +8.4% |
| 1y | -3.4% | +14.9% |
| ytd | -1.8% | +11.9% |
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LEVI Fundamental Analysis
Revenue trajectory is the crux of the Levi's story, and the available data points to a business growing at a modest but improving pace: trailing revenue implied by the $8.82 billion market cap and 1.40x PS ratio is roughly $6.3 billion, while consensus estimates project average revenue of about $7.39 billion (range $7.27-$7.51 billion) for the forward period, implying mid-teens percentage growth that would represent meaningful acceleration if achieved. The Q3 earnings release described broad-based revenue growth with a slight top-line miss, suggesting growth is real but not uniformly beating expectations, and the DTC/eCommerce channel is the identified driver of that growth as the company shifts mix away from wholesale. The investment case hinges on whether this mix shift can sustain growth as the Americas segment — the key revenue driver — faces a soft consumer, with Europe and Asia providing diversification but also exposure to FX and regional demand cycles. Profitability is solid for apparel retail: net margin stands at 9.20%, operating margin at 10.79%, and gross margin at a strong 61.73%, a level that reflects brand pricing power and the DTC mix shift rather than commodity basics economics. Net income is positive (EPS of $0.066 on a trailing basis, with forward consensus EPS of $1.87), and the Q3 earnings beat with broad-based growth suggests margins are holding or expanding rather than compressing, though the 10.79% operating margin leaves limited cushion if tariffs or promotional intensity rise. The 61.73% gross margin versus a 10.79% operating margin implies heavy SG&A and DTC infrastructure costs, so operating leverage on incremental revenue is the key swing factor for earnings. Balance sheet and cash flow look adequate but not fortress-like: debt-to-equity is 1.01, current ratio is 1.55, and ROE is a healthy 25.37% on a relatively thin equity base, while ROA of 6.57% reflects the capital intensity of retail. The 16.16x price-to-cash-flow ratio and 2.41% dividend yield with a 36.83% payout ratio indicate the company generates enough cash to fund both growth investment and shareholder returns, but the ~1.0x leverage means it is not fully self-funding and remains sensitive to rate and refinancing conditions. Free cash flow and quarterly cash flow statements were not provided in the data, so a full liquidity assessment is limited, but the combination of positive net income, a 1.55 current ratio, and a covered dividend points to a financially sound, if not over-capitalized, operator.
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?
Because Levi's net income is positive (net margin 9.20%, trailing EPS positive), the PE ratio is the appropriate primary metric, and the stock trades at 15.27x trailing earnings versus 12.28x forward earnings — a roughly 20% compression that implies the market expects meaningful EPS growth, consistent with consensus forward EPS of $1.87 versus the current trailing figure. The forward PE of 12.28x is low in absolute terms for a branded consumer company, and the PEG ratio of 0.087 is extraordinarily low, though that figure likely reflects a data quirk in the growth denominator and should be treated with caution rather than as a literal signal. On the secondary metrics, the stock trades at 1.40x sales, 3.87x book, 11.66x EV/EBITDA, and 1.42x EV/sales, all of which sit in value territory for a global brand with 61.73% gross margins. Peer comparison is constrained because the provided valuation data does not include an explicit industry average multiple; however, against the broader apparel-manufacturer universe, a 15.27x trailing PE and 1.40x PS are consistent with a mid-single-digit-growth branded retailer rather than a premium multiple, and the 2.41% dividend yield adds income support. The premium/discount question is best framed against the company's own history: historical ratios data was not provided, so a precise band comparison is not possible, but the current 15.27x trailing PE and 1.40x PS are unlikely to be at the top of Levi's post-IPO range given the stock is down 3.40% over the past year and 16.09% over three months — more plausibly the multiple sits in the lower half of its historical band, which is consistent with either a value opportunity or a market pricing in decelerating growth. The forward PE of 12.28x versus trailing 15.27x is the key valuation signal: if the company delivers the consensus $1.87 EPS, the stock re-rates cheaper on a forward basis, but if growth disappoints, the trailing multiple offers little downside cushion.
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 and operational risks center on a thin operating margin and moderate leverage. Operating margin of 10.79% against a 61.73% gross margin leaves limited cushion if tariffs or promotional intensity rise, since heavy SG&A and DTC infrastructure costs absorb most of the gross profit. Debt-to-equity of 1.01 means the company is not fully self-funding and is sensitive to refinancing conditions, while revenue concentration in the Americas segment exposes results to a soft US consumer. The forward EPS consensus of $1.87 versus trailing EPS of $0.066 means the valuation depends heavily on delivering substantial earnings growth; any shortfall would leave the 15.27x trailing PE without support.
Market and competitive risks include valuation compression and relative underperformance. The stock is down 16.09% over three months with relative strength of -18.78 versus SPY, and its 1.317 beta means it amplifies market moves by roughly 32%. Competition from vertically integrated fast-fashion players and premium denim upstarts pressures pricing, while tariff-related cost pressure across the apparel sector — highlighted in recent peer commentary — threatens the 61.73% gross margin. The wide analyst target range of $20.00-$35.00 signals that the market has not settled on a multiple, leaving room for further de-rating if growth decelerates.
Worst-case scenario: a weak holiday quarter combined with tariff-driven gross margin compression and Americas consumer softness would likely push the stock back toward its 52-week low of $17.72, a decline of roughly 13.3% from the current $20.44. A break below the October swing low of $18.70 would confirm the downtrend and could extend toward the $17.72 low, with the -27.37% max drawdown from the July high of $25.70 illustrating how quickly the stock can fall. In a more severe scenario where forward EPS estimates are cut, the stock could test the bear-case analyst target of $20.00 or below, implying a loss of at least 2.2% and potentially 13%+ from current levels.
FAQ
The most severe risk is consumer and margin pressure: operating margin of 10.79% against a 61.73% gross margin leaves little cushion if tariffs or promotions rise, and the Americas segment faces a soft consumer. Second is valuation and momentum risk, with the stock down 16.09% over three months and relative strength of -18.78 versus SPY, plus a 1.317 beta that amplifies market moves. Third is financial leverage, with debt-to-equity of 1.01 making the company sensitive to refinancing conditions. Fourth is execution risk on the DTC turnaround, where forward EPS of $1.87 versus trailing $0.066 means any growth shortfall would leave the 15.27x trailing PE unsupported.
The 12-month forecast has three scenarios: a 25% bull case targeting $26.47-$35.00 if DTC growth sustains and margins hold, a 50% base case targeting $22.50-$26.47 as the stock mean-reverts toward the analyst average, and a 25% bear case targeting $17.72-$20.00 if holiday demand weakens and tariffs compress margins. The base case is most likely, assuming forward EPS of $1.87 is met within the $1.80-$1.95 consensus range and gross margin stays near 61.73%. The key assumption is that the Americas consumer stabilizes rather than deteriorates, allowing the forward multiple to re-rate.
LEVI appears modestly undervalued on forward metrics: 12.28x forward earnings versus 15.27x trailing, 1.40x sales, 11.66x EV/EBITDA, and a 2.41% dividend yield. The ~20% compression between trailing and forward PE implies the market expects meaningful EPS growth to $1.87, and if delivered the stock re-rates cheaper. Against its own history, the stock being down 3.40% over the past year and 16.09% over three months suggests the multiple sits in the lower half of its post-IPO band rather than at a premium. The market is paying a fair-to-discount price for a branded apparel company, implying it expects modest growth rather than a premium turnaround.
From a risk/reward perspective, LEVI offers a 29.5% upside to the $26.47 average analyst target against roughly 13.3% downside to the $17.72 52-week low, a favorable ratio for a patient investor. The stock trades at 12.28x forward earnings with a 2.41% dividend yield and a 61.73% gross margin, which is cheap for a branded consumer company. However, the 16.09% three-month decline and -18.78 relative strength versus SPY show the market is skeptical, and the $20.00 low analyst target sits below the current price. It is a good buy for value-oriented investors with a medium-term horizon who can tolerate 1.317 beta volatility and want income, but not for those seeking near-term momentum or a proven growth story.
LEVI is better suited to a medium-to-long-term horizon of at least 12-18 months, given the turnaround thesis needs several quarters to prove out and the 1.317 beta makes short-term price action volatile. The 2.41% dividend yield with a 36.83% payout ratio rewards patient holders, and the 12.28x forward PE offers valuation support that short-term traders may not capture. Earnings visibility is moderate, with a tight $1.80-$1.95 EPS consensus range but a wide $20-$35 price target range, so short-term trading would be driven by momentum and the $18.70-$25.70 technical range rather than fundamentals. A minimum 12-month holding period aligns with the base-case mean-reversion toward the $26.47 average target.
