Analyst Predicts Levi Strauss to Fall Short of Q1 Earnings Estimate

levi strauss stock

Levi Strauss & Co. (LEVI:NYE) is scheduled to release its first-quarter financial results on April 6. Nonetheless, UBS analyst Jay Sole forecasts that the company’s Q1 earnings would fall short of estimates, mostly owing to lackluster domestic performance and increasing expenses. Sole has a Buy rating and a $21 price target on LEVI Strauss stock
shares, implying a potential 15% upside from present levels.

Sole cautions that the Wholesale segment’s downturn in the U.S. and Europe will continue to impact the company’s bottom line, even though analysts expect LEVI will generate Q1 revenue of $1.62 billion, up from $1.59 billion in the prior-year quarter. Yet, the company’s Direct-to-Consumer channel’s strength and varied business model contribute to its top-line expansion.

Sole anticipates that the company’s profitability will decline due to increased promotions and anticipates that LEVI will record earnings two cents below the average expectation of $0.32 per share. In contrast, the first fiscal quarter of 2022 produced earnings of $0.46 per share.

Although forecasting a dismal first quarter, Sole retains a strong stance on LEVI Strauss stock shares, anticipating that the business would continue to acquire market share in the jeanswear segment, with foreign sales accelerating beyond 2023. In addition, Sole anticipates the company will maintain its 2023 guidance despite disappointing Q1 results.

LEVI estimates fiscal 2023 revenues in the range of $6.3 billion to $6.4 billion, with adjusted earnings per share in the range of $1.30 to $1.40, down from $1.50 in fiscal 2022.

Although analysts anticipate a year-over-year fall in LEVI’s earnings, they remain confident about the stock’s potential, with four Buy and four Hold recommendations equating to a Stock Target Advisor’s consensus rating of Buy. The average price target of $19.72 represents an upside potential of 6.97%.

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