Levi Strauss (LEVI): Valuation in Focus After Direct-to-Consumer Gains and Dockers Divestiture

Levi Strauss (NYSE:LEVI) is in the spotlight after posting better-than-expected first quarter results. Its direct-to-consumer business now accounts for more than half of global revenue. Investors are watching the company’s evolving strategy closely.

See our latest analysis for Levi Strauss.

Levi Strauss' pivot towards direct-to-consumer sales and the decision to sell its Dockers unit have been a catalyst for the stock’s 21.07% year-to-date share price return, powering fresh momentum in 2024. With a 27.94% total shareholder return over the past year, long-term performance remains strong as the business focuses on its core strengths and brand legacy.

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But with shares already up over 20% this year and trading below analyst price targets, the key question now is whether Levi Strauss is undervalued or if investors have already factored in the company’s next phase of growth.

Most Popular Narrative: 21% Undervalued

Levi Strauss's most widely followed narrative places its fair value well above the last close of $21.09, suggesting significant upside if this trajectory holds. Investors are focused on the brand’s direct-to-consumer push and global reach as key valuation drivers. Below is a core narrative catalyst:

The brand's premium positioning is reinforced by collaborations (e.g., Beyoncé, NIKE, Sacai), fabric/fit innovation, and increasing full-price sell-through. These factors support higher average selling prices and margin expansion while capitalizing on consumer willingness to pay more for quality and sustainable brands.

Read the complete narrative.

What leads to such a bullish assessment behind Levi’s valuation? The answer lies in pivotal assumptions about its earnings trajectory and a premium price multiple that rivals category leaders. Want to unravel which ambitious projections make this possible? Tap to discover the details propelling this narrative’s high fair value calculation.

Result: Fair Value of $26.79 (UNDERVALUED)

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

However, ongoing tariff exposure and shifts in denim trends could undermine profit margins and the bullish case. This reminds investors that risks remain real.

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

Build Your Own Levi Strauss Narrative

If you have your own take or want to dig into the numbers firsthand, it’s easy to build your own investment story in minutes, your way. 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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