Investing.com – Barclays (LON:) Analysts began coverage in a note from Wednesday Levi Strauss and company (New York Stock Exchange:). with an Outperform rating, citing a combination of accelerating organic sales growth, operational improvements and attractive valuation as the basis for its outlook.
According to Barclays, the company expects sales to rise thanks to a recovery in its wholesale segment, an expanded range of women’s clothing and outerwear, and the continued evolution of denim styles.
These trends are expected to fuel Levi’s growth trajectory through 2025.
Analysts noted that Levi Strauss is addressing key operational challenges and opportunities, including a focus on its Project Fuel initiative, which aims to streamline operations and improve productivity.
The program, which includes cost savings and inventory optimization measures, is expected to improve efficiency and support the company’s transition to a direct-to-consumer model.
While the transition creates some pressure on margins due to increased costs associated with DTC operations, Barclays noted that Levi’s focus on data-driven merchandising and higher full-price sales could offset these headwinds.
Barclays also highlighted Levi Strauss’ undervalued position relative to its competitors in the apparel industry.
Analysts have a price target of $24, which represents an upside of 35.8% from the current share price of $17.67.
This estimate is supported by estimated earnings per share of $1.38 in 2025 and $1.57 in 2026, with a target P/E ratio of 15x for FY26, slightly below historical and peer group averages .
Key risks identified by analysts include the potential impact of tariffs, margin pressure from cost inflation and challenges in expanding DTC operations.