An attractive entry point has opened up into Levi Strauss after the recent market sell-off, according to JPMorgan. Analyst Matthew Boss upgraded Levi to overweight from neutral, but cut his 12-month price target by nearly 11% to $17. The new target suggests shares could jump nearly 26% from their latest close. Levi also pays a 3.85% dividend. Levi, down 30% over the past six months on macroeconomic concerns, surged 14% in early trading Tuesday on the back of JPMorgan’s upgrade. Boss believes the company’s combination of the stock and an improving business profile under CEO Michelle Gass provides an opportunity for investors to not only tap into a “multi-year mid-teens total return profile,” but also to invest in an increasingly popular apparel maker with strong fundamentals. “Levi’s total-addressable-market expansion as a denim lifestyle apparel brand under CEO Gass has translated to accelerated global demand momentum for 4 straight quarters,” Boss said, adding that the company is at an “early innings inflection.” The analyst highlighted that new customer acquisition, particularly of those between the ages of 18 and 30, is leading to higher average selling prices and more frequent purchases. Levi has also seen expanded gross margins, product cost savings and improved selling with its full-price products, Boss said. The company also has a stronger profitability profile compared to 2019 after it sold its lower-margin European footwear and Dockers businesses, and lessened its China sourcing to better mitigate tariff risks. Looking to this year’s catalysts, the analyst said Levi could see higher apparel demand during Easter and the spring season and outperform soft U.S. wholesale industry expectations. LEVI 1Y mountain Levi stock performance over the past year. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
