Levi Strauss & Co. (NYSE:LEVI) jumped 4.51% in premarket trading on Friday after the company beat estimates with its FQ2 earnings report. The strong numbers has Wall Street bulls doubling down on their positive views on LEVI.
Bank of America reiterated a Buy rating and $23 price objective following encouraging results that were said to display the continued execution and benefits from a diversified business model. BofA increased its full-year profit view on WFC to $1.55 to reflect the Q2 beat and held the FY23 EPS estimate at $1.68. The firm has confidence that LEVI is controlling what it can despite facing ongoing supply chain challenges, COVID lockdowns, and FX headwinds.
Citi also kept a Buy rating on LEVI, noting the beat was driven by strong U.S. and Europe sales, and lower SG&A. Analyst Paul Lejuez said Levi Strauss' (LEVI) brand strength continues to be evident in the strong sales of its core 501 product and the balanced growth in units and price.
Meanwhile, Wells Fargo said the key takeaway from the LEVI report was the reiterated outlook, which served as an upside surprise. "As investors continue to brace for numbers to be cut across our space, LEVI delivered a positive surprise — beating 2Q top- and bottom-line expectations and reiterating its FY guidance," noted analyst Ike Bochurow.
While there was some caution from LEVI management regarding the low-end U.S. consumer, Bochurow noted that LEVI was able to buck the trend and continued to exude strength across all channels.
Wells Fargo kept an Overweight rating on LEVI and turned even more constructive on the path ahead.
"Bigger picture, while we do note that their 2H plan implies a material change in trajectory (slower top-line, GM contraction) — any softlines name beating plan and keeping numbers intact is likely to be a rarity this EPS season. The fundamental story at LEVI continues to play out — brand strength, ongoing bottoms cycle, AUR initiatives working, casualization of work — which keeps us bullish on the story."