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LivestreamMenuLevi Strauss has delivered the upside that Wells Fargo expected. Now, analysts at the bank are turning cautious. The bank downgraded the apparel stock to equal weight from overweight. It maintained its price target of $25, which implies a 2% loss from Monday’s close. Analyst Ike Boruchow noted that Levi has delivered earnings upside along with consecutive beats and forecast hikes in the first half of 2026. But he said that the fundamental story of the company is in question, as some concerns under the hood of strong headline figures have begun to bubble up. “In 2Q, while rev plan beat by ~300bps 1) there was no upside to margins (9.0% vs. planned 8-9%), 2) while 3Q guide of 11.9% came in ~100bps below Street, and 3) their 4Q margin plan appears optimistic,” Boruchow wrote in a Tuesday note. “LEVI continues to run parallel US DCs while again disappointing on flow-through (similar to late 2025), we believe there is a more balanced risk/reward today – especially given that CFO [Harmit] Singh is set to retire in November.” LEVI YTD mountain Levi Strauss & Co. year-to-date. Boruchow added the stock has had a strong run of late, up more than 40% from its mid-March lows, while the S & P 500 is up just 14% in the same period. And while the bank is moving to the sidelines on the stock now, that doesn’t alter the long-term outlook for the company, Boruchow said. It’s rather a reflection of the stock in the near-term potentially pricing in too rosy of a forecast. “We are not making any changes to our estimates or PT ($25) as our LT view of LEVI remains constructive,” Boruchow wrote. “We see more of the upside now reflected in current expectations and valuation, while 2H execution risk has increased and warrants moving to an EW rating.” Levi shares slipped more than 2% following the downgrade. Most analysts covering the stock are bullish despite Wells Fargo’s downgrade. Of the 16 who cover it, 14 rate it a buy or strong buy, according to LSEG.Read More
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