On Wednesday, Barclays (LON:BARC) began coverage on Levi Strauss & Co . (NYSE:NYSE:LEVI) stock, assigning an Overweight rating and setting a price target of $24.00. The firm's analyst pointed to several factors that could drive the company's growth in 2025, including increased wholesale demand, expansion in women's and tops categories, and the ongoing shift in denim styles.
Levi Strauss & Co. is expected to benefit from organic sales acceleration due to these market dynamics. Additionally, the analyst highlighted the potential long-term productivity gains from Project Fuel, an initiative aimed at streamlining operations and focusing on the core Levi's brand.
Despite acknowledging challenges such as unfavorable margin conditions, potential tariff impacts, and a strong U.S. dollar, Barclays anticipates that the company's sales growth will be the most significant factor moving forward.
The analyst also noted that while Levi faces both external and internal risks, there are opportunities for the company to address market share losses in men's bottoms, enhance operational capabilities, optimize its assortment, and invest in direct-to-consumer channels.
Building agility into the merchandising organization, particularly for tops, was also mentioned as a key area for the company's potential success. The price target of $24.00 reflects Barclays' confidence in Levi's ability to improve its fundamentals and suggests that the stock's valuation is attractive enough to allow for further expansion.
In other recent news, globally recognized apparel company, Levi Strauss & Co., has secured an amended credit agreement extending the term to 2029. This amendment, made with JPMorgan Chase (NYSE:JPM) Bank and other lenders, allows for an increase in the total available commitments up to $1.15 billion.
The company also announced the appointment of Daniel Geballe to its board of directors, effective April 2025, following the retirement of current member David Friedman. Geballe's expertise in environmental management and business administration is expected to contribute to Levi Strauss's growth.
In terms of financial updates, Levi Strauss reported a 2% increase in net revenues and a significant 5% global growth for the Levi's brand in its third-quarter fiscal 2024 earnings call. The company highlighted record Q3 gross margins of 60% and a significant expansion in adjusted EBIT margin. However, a potential sale of its Dockers brand was announced following a 15% decline in Dockers' sales in the third quarter.
Analyst firms have revised their outlook on the company. Morgan Stanley (NYSE:MS) reduced its price target for Levi Strauss, citing concerns about short-term sales risks. Similarly, TD Cowen lowered its price target, maintaining a Buy rating on the stock. These are some of the recent developments concerning Levi Strauss & Co.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.