Shares of Levi Strauss & Co. (LEVI) took a hit on Friday, despite the denim brand reporting stronger-than-anticipated results for the third quarter and seeing increased price targets from various Wall Street analysts. By around 2:14 p.m. ET, the stock plummeted over 11%, hitting approximately $22 per share.
This downturn followed investor concerns regarding Levi’s projection that the forthcoming quarter’s margins would be affected by tariffs implemented during the Trump administration. The California-based company is anticipating a gross margin reduction of about 130 basis points in the fourth quarter.
Levi Strauss Sees $1.5 Billion in Third Quarter Sales
In the three-month period ending in August, Levi’s sales improved by 7% year-over-year, totaling $1.5 billion. The company’s earnings per share reached 34 cents, surpassing analyst predictions of 31 cents and presenting a 3% increase from the previous year.
The company remains confident in its direct-to-consumer strategy, which has prompted a raised outlook for the fiscal year. They expect revenue to grow by an additional 3% by the close of fiscal 2025. CEO Michelle Gass expressed optimism, stating the business is “well positioned heading into the holiday season” and aims to achieve sustained, profitable growth in 2026.
Wall Street Shows Optimism for Levi Strauss
After the earnings announcement, several Wall Street analysts adjusted their price targets for Levi’s stock, indicating potential upside. For instance, UBS analyst Jay Saul elevated his target from $28 to $32 while keeping a buy rating. Similarly, JPMorgan analyst Matthew Vos raised his target from $23 to $33, maintaining an Overweight rating, citing anticipated higher profits and a cautious outlook from the company.
Conversely, Morgan Stanley analyst Alexandra Stratton only slightly adjusted her price target from $19 to $20 per share, opting to retain the equal weight ranking. She expressed skepticism about the company’s ability to sustain profit growth beyond 2026.
Is LEVI a Good Stock to Buy Now?
On a broader note, Levi Strauss stock has currently garnered a consensus recommendation of “Strong Buy,” according to TipRanks data, which is based on 9 Buy ratings and 3 Holds from 12 analysts over the last three months.
Furthermore, LEVI’s average price target of $26.27 suggests a potential growth of 21% from its current price.
