Levi Strauss & Co. (NYSE:LEVI) is scheduled to announce its fiscal second-quarter (ended May 28, 2023) results on Thursday, July 6. Citi analyst Paul Lejuez expects the company’s results to roughly meet the consensus estimates due to slowing demand in its U.S. direct-to-consumer stores.
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Nevertheless, the analyst remains cautious about the second half of 2023, noting potential risks that could impact Levi’s performance during that period.
Just five days ago, Lejuez reiterated a Hold recommendation on LEVI stock. It is worth pointing out that the analyst lowered his price target to $15 from $17. The revised price target implies an upside of about 4% from the current levels.
LEVI: Wall Street’s Expectations
Currently, the Street expects Levi to post earnings of $0.03 per share in Q2, compared with $0.29 per share reported in the prior-year period.
Meanwhile, Wall Street expects LEVI to post revenue of $1.34 billion in Q2, compared to $1.47 billion in the prior-year quarter. It’s worth highlighting that the company has surpassed analysts’ sales estimates 75% of the time in the past 12 months, compared to the industry average of 64.32%.
Management’s Thoughts on Q2
In the first quarter earnings call, management reaffirmed its 2023 net revenues expectations of $6.3 billion to $6.4 billion and adjusted EPS in the range of $1.30 to $1.40.
During the Q1 earnings call, Levi’s management expressed concerns regarding the excess inventory levels, which is a challenge shared by numerous retailers. As a result, it remains to be seen whether the company’s initiatives to address this issue through promotional activities and discount offers have significantly impacted its profit margins in the Q2 quarter.
Is LEVI a Good Stock to Buy Now?
LEVI stock has received four Buy and four Hold recommendations, translating into a Moderate Buy consensus rating on TipRanks. The analysts’ average price target of $17.88 implies 24.17% upside potential.
