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Key Takeaways
- Jefferies reduced Levi Strauss (LEVI) price target from $27 to $25 while maintaining its Buy rating.
- Stifel trimmed its price target from $28 to $27, also retaining a Buy rating despite revenue headwinds.
- Shares currently trade at $19.70, reflecting a 0.25% decline.
- The company reports earnings in six days, with UBS projecting $0.36 per share for Q3.
- A recent cybersecurity breach involved unauthorized access to internal files but no consumer data compromise.
Shares of Levi Strauss & Co. (LEVI) are trading at $19.70, slipping 0.25% as two prominent Wall Street firms have adjusted their expectations downward just days before the denim maker’s quarterly earnings release.
Jefferies reduced its price objective to $25, down from a previous $27 estimate. The firm continues to recommend the stock as a Buy.
Stifel followed suit with its own revision, lowering the target to $27 from $28. Despite this adjustment, the firm’s Buy recommendation remains unchanged.
With earnings scheduled to arrive in six days, both firms are recalibrating their models in anticipation of the financial results.
Jefferies anticipates the company will deliver a respectable third quarter performance. The firm highlights the robust gross profit margin of 61.72% as a fundamental strength.
According to Jefferies, full-year earnings guidance may see a slight upward adjustment. However, the revenue forecast is anticipated to remain relatively flat due to persistent inflationary headwinds affecting consumer spending.
Reasons Behind the Downward Revisions
Jefferies cited challenges in the European marketplace alongside potential weakness among budget-conscious American consumers. The firm’s proprietary alternative data tracking U.S. sales activity showed inconsistent patterns.
Stifel’s rationale focuses on separate considerations. The firm recalibrated its revenue and profit forecasts based on channel feedback and anticipated cotton price impacts that won’t materialize until 2027.
Despite the reduction, Stifel’s earnings projections remain above Wall Street consensus estimates for both 2026 and 2027. The firm’s margin assumptions incorporate tariff mitigation strategies and enhanced direct-to-consumer profitability.
Stifel views the ongoing denim renaissance, particularly wide leg silhouettes, as still being in mid-cycle. The firm believes Levi Strauss maintains a competitive advantage within this product category.
Feedback from retail partners has been encouraging, according to Stifel. However, alternative sales data suggests softer performance, which the firm attributes to macroeconomic pressures and heightened competition for discretionary spending.
Valuation Metrics and Earnings Outlook
Levi Strauss shares are currently valued at 12.5 times fiscal 2026 earnings estimates. This represents a discount compared to the lifestyle apparel sector median of 14.3 times calendar 2026 projections.
Stifel’s revised $27 price target implies a multiple of 15.5 times its fiscal 2027 EPS forecast of $1.74. This compares favorably to the Street consensus of $1.71 for the corresponding timeframe.
UBS has maintained its more optimistic stance, preserving both its Buy rating and $34 price objective. The firm anticipates third quarter earnings of $0.36 per share, matching consensus expectations.
UBS projects a more favorable revenue trajectory that could enable the company to raise its full fiscal 2026 earnings guidance. This represents a notably more constructive view than the assessments from Jefferies and Stifel.
Jefferies also acknowledged the company’s recent appointment of a new chief financial officer. The firm interprets this leadership addition as evidence of sustained commitment to international expansion.
The firm identifies the fourth quarter as a critical proving ground for operating margin performance. Jefferies is targeting mid-single digit revenue growth or better as the company enters 2027.
In other developments, Levi Strauss disclosed a cybersecurity incident earlier this month. The company revealed that unauthorized individuals gained access to internal documents through social engineering methods.
According to Levi Strauss, customer information was not compromised in the security breach. External cybersecurity specialists have been engaged to conduct a comprehensive investigation.
The company’s board of directors also experienced a recent change. Robert Eckert stepped down upon reaching the mandatory retirement threshold, a departure unrelated to any policy disputes or operational concerns.
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