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Goldman Sachs raises Levi Strauss shares target on improving momentum

EditorEmilio Ghigini
Published 04/04/2024, 07:38 AM
© Reuters

On Thursday, Goldman Sachs adjusted its outlook for Levi Strauss & Co. (NYSE: NYSE:LEVI), increasing the share price target to $22.00, up from the previous $14.00. The firm maintained a Neutral rating on the shares. The revision reflects a more constructive view of the company following a quarter that showed signs of improving business momentum.

The analyst from Goldman Sachs acknowledged a positive shift in Levi Strauss's core brand growth within the United States, despite ongoing pressures in the wholesale segment. This growth excludes figures from Signature, Denizen, and the company's Exclusive Product Range (ERP). The analyst expressed satisfaction with the early signs of recovery, particularly in the core brand's performance.

Management's efforts in enhancing the brand through marketing, innovation, and merchandising, alongside margin improvements from Project FUEL, promotional strategies, and operational efficiencies, were highlighted as key drivers for a more optimistic sales and margin outlook. These initiatives are seen as instrumental in the company's forward momentum.

In response to the observed business improvements, Goldman Sachs has raised its estimates and the 12-month target price for Levi Strauss. The revised price target takes into account the stronger recent momentum the company has demonstrated. However, the firm remains Neutral on the stock, indicating a wait-and-see approach for further evidence of sustained sales improvement before adopting a more positive stance.

InvestingPro Insights

Levi Strauss & Co. (NYSE: LEVI) has recently gained attention from analysts, and real-time data from InvestingPro further enriches this narrative. The company has a market capitalization of $7.43 billion, reflecting its significant presence in the apparel industry. With a trailing twelve months P/E ratio of 18.49, Levi's valuation aligns with its earnings, offering a potentially attractive entry point for investors looking at traditional valuation metrics.

InvestingPro Tips highlight the company's financial prudence and growth potential. Levi Strauss has a track record of raising its dividend for 5 consecutive years, signifying a commitment to shareholder returns. Additionally, the company's liquid assets surpass its short-term obligations, indicating a strong liquidity position. This financial stability is complemented by a moderate level of debt, suggesting a balanced approach to leverage and growth.

Levi's stock has experienced a significant price uptick over the last six months, with a 41.16% total return, underscoring a robust performance in the market. Moreover, analysts predict the company will be profitable this year, supported by a profitable last twelve months. For readers interested in further insights, InvestingPro offers additional tips, which can be accessed through their platform. To enhance your investment research, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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