Stifel raises Levi Strauss stock price target to $27 on DTC growth potential

Multiple investment firms, including Stifel, BofA Securities, and UBS, have raised price targets and reiterated Buy ratings on Levi Strauss & Co. (LEVI), with Stifel setting a $27 target and UBS at $28, citing potential for Q3 FY2025 revenue and EPS upside. This positive outlook is driven by Levi's successful direct-to-consumer transformation, increasing engagement with younger demographics and higher-value non-denim products, anticipated margin improvements, and easing revenue comparisons in H2 FY2025. The company also recently priced €475 million in senior notes due 2030, reflecting ongoing strategic financial activities.

Analysis

Analyst sentiment on Levi Strauss & Co. (LEVI) is strongly positive, with Stifel, BofA Securities, and UBS all issuing Buy ratings and increasing price targets to the $27-$28 range. The bullish consensus is underpinned by the company's successful strategic execution, particularly its direct-to-consumer (DTC) transformation, which is viewed as being in its "middle innings" with potential to grow the DTC mix from 50% by another 10 percentage points. This shift is expected to drive EBIT margin improvement. Analysts highlight LEVI's growing traction with younger consumers and in higher-value, non-denim segments as key growth drivers. Stifel projects a potential $50 million revenue and $0.05 adjusted EPS upside for Q3 FY2025, noting that stabilizing wholesale business and significantly easing revenue comparisons in the second half of FY2025 create capacity for upside surprises. The company's recent operational and financial activities, including the appointment of a new Chief Supply Chain Officer and the pricing of €475 million in senior notes due 2030, further signal a proactive approach to managing growth and capital structure.

Key Decisions for Investors

• Given the uniform Buy ratings and increased price targets from multiple analysts, investors should view the current consensus as strongly positive, supported by the company's successful pivot towards higher-value segments and younger demographics.
• Investors should closely monitor the growth of the direct-to-consumer (DTC) sales mix, as its expansion from 50% and the associated EBIT margin improvement are the primary drivers of the current investment thesis.
• The second half of fiscal year 2025 represents a key potential catalyst, as easing year-over-year comparisons could enable the company to deliver significant revenue and EPS upside, potentially leading to stock outperformance.