Levi Strauss & Co. (NYSE:LEVI) is scheduled to announce its fiscal third-quarter (ended August 27, 2023) earnings results on Thursday, October 5, after the market closes. Importantly, LEVI has an impressive history of delivering strong quarterly performances. The company beat earnings expectations for 12 consecutive quarters, indicating the potential for it to outperform estimates again in the to-be-reported quarter.
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Currently, the Street expects LEVI to post earnings of $0.27 per share in Q3, compared with $0.40 per share reported in the prior-year period. Meanwhile, analysts expect LEVI to post revenue of $1.54 billion in Q3, compared to $1.52 billion in the prior-year quarter.
Here’s What Analysts are Saying about LEVI Stock
Prior to the company’s earnings release, two analysts have rated the stock a Buy, and two have assigned a Hold rating to LEVI stock.
Among the bullish analysts, Robert Drbul from Guggenheim has revised his Q3 EPS estimate to $0.25, down from the previous estimate of $0.26. This adjustment is due to expected weakness in U.S. Wholesale, slower adjustments in distribution centers and warehouses related to fill rates and inventory levels, and limited progress in pricing initiatives.
Nevertheless, Drbul remains positive about LEVI’s direct-to-consumer (DTC) and international market prospects. He also expects the company to gain market share and achieve growth in line with or surpassing industry averages.
The analyst reaffirmed his Buy rating on LEVI stock on September 28 with a price target of $19 (implying 44% upside potential).
Another analyst, Oliver Chen of TD Cowen, initiated coverage on LEVI stock with a Buy rating and price target of $16. Chen believes LEVI is well-positioned to grow its DTC business and international presence. Moreover, the analyst believes the stock is reasonably valued.
Is LEVI Stock a Buy, According to Analysts?
Wall Street is cautiously optimistic about LEVI. The stock has a Moderate Buy consensus rating based on five Buys and four Hold ratings assigned in the past three months. The average LEVI stock price target of $16.67 implies 24.6% upside potential.
Insights from Options Trading Activity
TipRanks now presents options activity to help investors plan their trades ahead of earnings releases. Options traders are pricing in LEVI stock to move by +/-10.23% after reporting earnings. The anticipated earnings move is determined by computing the at-the-money straddle of the options closest to the expiration after the earnings announcement.
Ending Thoughts
It’s worth mentioning that management’s previous reduction in full-year sales growth guidance may have contributed to investor skepticism. Nevertheless, Levi’s strategic move to reduce reliance on struggling wholesale distribution networks and focus more on DTC sales is encouraging. Also, the company has an impressive track record of beating earnings, making it likely to beat earnings again.
