By Lydia You and Teresa Rivas
Sweatpants are out and jeans are back in, with denim mainstay Levi's at the forefront of the resurgence. Analysts are bullish about $Levi Strauss & Co.(LEVI.US)$ as they look forward to its second-quarter earnings report on July 8.
UBS analyst Jay Sole reiterated a Buy rating on Levi, and raised his price target 6% to $36 from $34, which is 14% above the average price target of $31.56. Sole forecasts a second-quarter earnings per share beat with a previous estimate of five cents raised to 13 cents, and he raised his 2021 EPS forecast by 14%. All nine analysts tracked by FactSet have a Buy rating or the equivalent on Levi.
Analysts are looking for Levi to earn nine cents a share on revenue of $1.21 billion. In Levi's previous quarter, reported in April, the company said it earned 34 cents a share, a dime ahead of consensus estimates, on sales of $1.31 billion, which also beat analysts' expectations.
The brand power of Levi will likely carry these strong results, Sole wrote. As health crisis recovery progresses, retail clothing brands are experiencing a boon as consumers switch out their at-home loungewear for trendier fashion just in time for back to school and in-person gatherings.
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Earnings data from Bloomberg
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Data from UBS shows that "searches for several denim categories are rising double-digits, with baggy jeans leading at up 200% year over year in May," and the Levi brand is ranked #1 in men's and women's jeans on Amazon Best Sellers. J.P. Morgan expects U.S. apparel brands to jump 21% in sales compared to last year as workers return to the office.
Telsey Advisory Group on Levi Strauss: Firm cites impressive Q1 results with management seeing potential for 'return to pre-2020 revenue levels a month or two sooner than previously anticipated'
Conference call
Levi Strauss & Co. to Webcast Second Quarter 2021 Earnings Conference Call is scheduled at 02:00 PM PT, July 8, 2021.
(END) Dow Jones Newswires
July 06, 2021 03:59 ET (07:59 GMT)
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