Levi Strauss (LEVI): Evaluating Valuation After Q3 Earnings Beat and Tariff Warning Shift Market Focus

Levi Strauss (LEVI) delivered better than expected third-quarter results and raised its full-year profit outlook. However, the news was quickly overshadowed by management’s warning about new U.S. tariffs, which could cut margins for the upcoming holiday season.

See our latest analysis for Levi Strauss.

Despite strong quarterly growth and an upgraded profit outlook, Levi Strauss’s share price has seesawed, dropping 12.9% this week as investors refocused on new tariff-driven margin risks for the fourth quarter. Still, the stock has delivered a solid 14.5% total shareholder return over the past year and is up more than 58% for three years, underscoring impressive long-term momentum. However, near-term sentiment appears cautious.

If the recent volatility around Levi’s has you eyeing other opportunities, now could be the right moment to broaden your scope and uncover fast growing stocks with high insider ownership

Given these crosscurrents, the key question is whether Levi Strauss’s recent pullback now reflects an undervaluation or if the market has already priced in future growth and potential margin headwinds. Is there a buying opportunity here or not?

Most Popular Narrative: 20% Undervalued

Levi Strauss’s most widely followed valuation narrative places its fair value at $26.46, a strong premium compared to the recent close of $21.16. This raises the key question: does the current market price undervalue Levi's future potential, or are risks weighing too heavily?

"Ongoing robust growth in international markets, particularly Europe (up 15% with double-digit gains in France, UK, Italy, and Spain) and Latin America (up 18%), shows that Levi's is successfully capturing rising demand from an expanding global middle class and urbanization, which directly supports sustainable revenue expansion and reduced geographic risk. Levi's decisive shift to a Direct-to-Consumer-first business, now representing over half of sales, is delivering higher margins (DTC EBIT up 400bps YTD), greater control over brand experience, and faster innovation cycles, driving sustained improvements in net margins and future earnings."

Read the complete narrative.

What’s behind this aggressive fair value? The explanation centers on ambitious revenue expansion, margin growth, and a future profit multiple that suggests confidence in Levi’s evolution. Want to see the exact projections and financial logic that justify this target? Don’t miss the narrative’s key assumptions hiding beneath the headline valuation.

Result: Fair Value of $26.46 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, rising tariff exposure and a heavy reliance on Levi’s core brand remain potential catalysts that could limit both growth and margin expansion in the future.

Find out about the key risks to this Levi Strauss narrative.

Build Your Own Levi Strauss Narrative

If you want to test a different thesis or dig into the numbers yourself, you can easily craft your own analysis and see where it leads. Do it your way

A great starting point for your Levi Strauss research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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