Jefferies Initiates Levi's with Buy on Growth Outlook

Jefferies Initiates 'Buy' Rating on LEVI Stock

Levi Strauss & Co. shares experienced a notable increase of over 2% after financial services firm Jefferies initiated coverage on the stock with a 'Buy' rating. This positive assessment reflects strong confidence in the denim apparel maker's future performance.

Strategic Shift Drives Positive Outlook

The optimistic rating is based on Levi's successful strategic pivot towards a direct-to-consumer model and an increased focus on higher-value products. Jefferies analysts believe this business reshaping positions Levi's to consistently gain market share and achieve stable growth in both revenue and profits.

Financial Projections and Market Impact

Jefferies projects that Levi Strauss can generate annual revenue growth of 4% to 5% or more over the long term. The firm also anticipates operating margins will rise towards the 15% mark. This robust financial profile supports a mid-teens earnings multiple, which is above the stock’s historical average valuation.

Summary

The 'Buy' rating from Jefferies underscores the market's growing recognition of Levi's strategic evolution. Investors are responding positively to the company's potential for sustained market share expansion and improved profitability driven by its direct-to-consumer and premiumization strategies.

FAQ

Q: Why did Jefferies rate Levi Strauss stock as a 'Buy'?
A: Jefferies cited Levi's strategic shift to direct-to-consumer sales and premium products, positioning the company for significant market share gains and steady growth.

Q: What was the immediate effect on Levi's stock?
A: Following the announcement, Levi Strauss shares increased by more than 2% during trading.

Source: Investing.com