Guggenheim analyst Robert Drbul maintained a Buy rating on Levi Strauss & Co ( LEVI ) and set a price target of $26.
“We remain comfortable with our estimates and long-term outlook for the company, as laid-out in detail in our initiation report published April 15 (see here). In 2Q, we forecast ~4% revenue growth (~7.5% in CC ), led by continued International momentum, and ~flat adjusted EBIT margins, with gross margin gains offset by SG&A expense rate deleverage. Our 2Q/FY19 EPS estimates of $0.13/$1.07, respectively, are in-line with consensus. We remain BUY- rated on LEVI with a $26 PT, which is based on 21.7x our FY2020E EPS of $1.20. In 2Q, we forecast revenue growth of ~4% to $1.294bn, or up ~7.5% in CC . Our revenue forecast is roughly in-line with consensus at $1.297bn and incorporates a nearly 400bps growth headwind from FX (similar the 1Q headwind; we expect this FX headwind to decline to 0-50bps in 2H).”
AVERAGE PRICE TARGET $25
AVERAGE RECOMMENDATION OVERWEIGHT
Levi Strauss & Co. engages in the design, marketing, and sale of apparel products. The company offers jeans, casual and dress pants, tops, shorts, skirts, jackets, footwear, and related accessories. It operates through the following geographical segments: Americas, Europe, and Asia. The company was founded by Levi Strauss in 1853 and is headquartered in San Francisco, CA.