Levi Strauss Earnings Preview: Will Online Boom Translate to Strong Q2 Showing?

Denim giant Levi Strauss (LEVI: NYE) is set to unveil its second-quarter financial results tomorrow, June 26th. Investor anticipation is brewing, with analysts painting a picture of potential growth for the company.

 

LEVI: Expected Q2 performance 

Levi Strauss is expected to post an 8.4% YoY growth in its Q2 revenue, bringing the total to approximately $1.45 billion. What’s driving this growth? The answer lies in the surge of online sales witnessed in the past fiscal year. But it’s not just revenue where LEVI anticipates a boom. Analysts project a 175% YoY growth in the company’s EPS, pushing it up to $0.11 from a challenging Q2 in 2020.

Yet, it’s essential to tread with caution in interpreting these figures. On the geographic front, Levi is estimated to experience mixed results: bolstered performance in the Americas with a 15.9% revenue increase but potential decline in European markets.

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Stock Target Advisor’s Analysis on LEVI Stock: 

Stock Target Advisor has marked Levi’s stock as ‘Sell,’ with a target price of $21.17, implying a projected 12-month decrease of -8.84%, adds an element of caution. Yet, the analyst firm’s average target price stands at $21.89, backed with a ‘Strong Buy’ rating.

In terms of positive signals from LEVI, highlights include substantial cash flow, high market capitalization, and superior revenue growth. However, negatives aren’t absent. The company’s stock is considered overpriced compared to its book value and earnings; returns are below the median, manifested in its poor return on equity.

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Bottom Line:

Tomorrow’s earnings report will be a key indicator of Levi Strauss’ momentum. Earnings per share are expected to show significant improvement, but a clear picture of the company’s future strategies will be vital for long-term investor decisions.

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