LEVI: Future Will Be Driven By Strong Brand Momentum And International Sales

Levi Strauss's analyst price target has increased to approximately $27. Analysts cite strong brand momentum, resilient gross margin performance, and optimism around international growth as key drivers behind the new valuation.

Analyst Commentary

Recent analyst commentary on Levi Strauss has reflected a mix of optimism about the company's brand strength and growth potential, alongside some caution regarding its near-term outlook and spending. Below, key takeaways are organized to capture both the bullish and bearish perspectives influencing current valuations and expectations.

• Bullish analysts have highlighted the exceptional strength of the Levi's brand, positioning it as a significant competitive advantage that may sustain growth and benefit from ongoing casualization trends in global fashion.
• The raising of price targets by several analysts reflects confidence in the company's ability to deliver solid revenue growth and resilient gross margins, particularly through strong North America direct-to-consumer channels and favorable foreign currency movements.
• Analysts see Levi Strauss as executing well on strategic initiatives, with the growing popularity of "classic American" brands and robust demand for denim trends contributing positively to sales momentum.
• International diversification is identified as a key mitigant to risks such as tariffs, with over half of company revenues generated outside the U.S. This supports the view that margin headwinds can be effectively managed.

• Some analysts are cautious about the company's near-term outlook, expressing concern that despite recent solid results, the stock could face headwinds due to expectations for increased spending and margin pressure through 2026.
• Crowded positioning among investors is cited as a potential risk, which could limit further share price appreciation if near-term challenges persist.
• Analysts note that external factors, such as tariffs, could contribute to slightly higher margin headwinds for the next fiscal year, even if currently seen as manageable.

What's in the News

• Levi Strauss repurchased 4,989,605 shares between July and September 2025 for $120 million, completing the buyback program announced in June 2022. In total, 15,525,252 shares have been bought back for $309.54 million (Key Developments).
• The company provided revenue guidance for the fourth quarter of 2025, expecting organic net revenue growth of approximately 1%. Reported net revenues are expected to decline by around 3% due to noncomparable items and changes in the revenue base (Key Developments).
• Levi Strauss raised its earnings guidance for 2025, now projecting reported net revenue growth of approximately 3%, an increase from the previous range of 1% to 2%. Organic net revenue growth is anticipated to be approximately 6%, up from a prior forecast of 4.5% to 5.5% (Key Developments).

Valuation Changes

• Fair Value: Remains virtually unchanged at $26.79, indicating stability in long-term valuation assumptions.
• Discount Rate: Increased slightly from 9.20% to 9.34%. This reflects a minor rise in perceived risk or cost of capital.
• Revenue Growth: Holds steady at approximately 1.89%, with no material changes to expected top-line momentum.
• Net Profit Margin: Stable at 10.31%, suggesting consistent profitability expectations.
• Future P/E: Edged up marginally from 18.25x to 18.32x. This indicates very little change in forward earnings multiples.