Investing.com - JPMorgan has raised its price target on Levi Strauss & Co. (NYSE:LEVI) to $23.00 from $18.00 while maintaining an Overweight rating following the company's second-quarter earnings report.
The denim maker reported adjusted earnings per share of $0.22, exceeding consensus estimates of $0.14, with 9% broad-based organic revenue growth that doubled Street expectations and management's previous guidance of 3.5%-4.5%. Adjusted EBIT margins reached 8.3%, outperforming consensus estimates of 6.1% by 220 basis points. InvestingPro data shows impressive gross profit margins of 60.8% and strong cash flows that adequately cover interest payments.
Levi Strauss has raised its fiscal year 2025 adjusted EPS guidance to $1.25-$1.30, up from previous estimates and above the Street consensus of $1.23. The company also increased its full-year revenue forecast to 4.5%-5.5% organic growth year-over-year, or 1% to 2% reported revenue growth, compared to prior guidance of 3.5%-4.5% organic growth or -1% to -2% reported revenues.
Management reiterated its expectation for 70-90 basis points of adjusted EBIT margin expansion year-over-year to 11.4% to 11.6%. The improved guidance incorporates the flow-through of second-quarter gross profit dollar upside, which more than offset a full-year post-mitigation tariff impact of 20 basis points.
By region, management maintained its outlook for low-to-mid single-digit full-year organic revenue growth in the Americas, implying a low-single-digit second-half decline relative to 10% first-half growth. For Europe, the mid-single-digit full-year organic revenue outlook suggests low-single-digit second-half growth compared to 9% first-half growth. With an overall Financial Health score rated as "GOOD" by InvestingPro, which offers comprehensive analysis and 10 additional ProTips for LEVI, investors can access detailed insights through the platform's Pro Research Report, available for over 1,400 US stocks.
In other recent news, Levi Strauss & Co. reported a robust second quarter for 2025, with earnings per share (EPS) of $0.22, significantly surpassing the forecast of $0.13. The company's revenue also exceeded expectations, reaching $1.4 billion against a forecast of $1.37 billion. Following these results, Levi Strauss management raised its fiscal year 2025 earnings guidance from $1.20-1.25 to $1.25-1.30 per share. Stifel, Wells Fargo, and Citi have all increased their price targets for Levi Strauss, citing strong execution and sales growth. Stifel raised its target to $24, Wells Fargo to $25, and Citi to $22. The company has been praised for its strong performance across multiple segments, including a 13% increase in e-commerce and a 10% rise in international sales, driven by Europe and Latin America. Despite potential tariff impacts, Levi Strauss increased its fiscal year 2025 guidance, with analysts noting the company's diversified revenue and sourcing base. These developments reflect the company's strategic focus on direct-to-consumer initiatives and product innovations.