Jefferies has opened coverage on Levi Strauss & Co. (NYSE:LEVI) with a Buy recommendation and a $25.00 price objective, the firm said on Wednesday. In its initiation note, the research house focused on Levi’s strategic pivot toward direct-to-consumer (DTC) channels, which now make up roughly 50% of total sales.
The bank argued that the larger DTC footprint gives Levi Strauss increased control over pricing, inventory management and product innovation. Jefferies linked this channel mix shift to a robust gross profit margin, reporting a 61.7% margin for the trailing twelve months.
Jefferies also called out the company’s product mix evolution. Tops and women’s apparel account for 29% and 39% of Levi’s sales, respectively, and those segments are delivering double-digit percentage growth, according to the note. The analyst house framed these trends as evidence of Levi’s transformation from a primarily denim-focused maker into a broader lifestyle brand.
On growth expectations, Jefferies expressed confidence in Levi’s premiumization strategy. The firm expects continued growth in average unit retail prices and projects high-single-digit percentage expansion in DTC channels. In contrast, Jefferies modeled wholesale to grow at flat to low-single-digit rates.
Shareholder returns and capital allocation were also addressed. Jefferies anticipates the company will resume or expand share repurchases following an accelerated buyback program that runs through the first half of 2026. The research team views Levi Strauss as positioned for steady mid-single-digit percentage revenue growth over the long term and judges the company’s goal of a 15% operating margin to be achievable in the medium term.
Levi has maintained a consistent shareholder-return posture, increasing its dividend for seven consecutive years. The current dividend yield stands at 2.88%, Jefferies noted.
Supplementary InvestingPro data cited in the initiation highlights additional financial strengths: Levi Strauss can cover interest payments from its cash flows and operates with a moderate level of debt. The note referenced InvestingPro’s availability of detailed Pro Research Reports on Levi’s and more than 1,400 other U.S. equities for investors seeking deeper analysis.
In company results cited by Jefferies, Levi Strauss posted fourth-quarter 2025 earnings that beat expectations on both the bottom and top lines. The company reported earnings per share of $0.41 versus a forecast of $0.39, and revenue of $1.8 billion compared with an expected $1.71 billion.
Despite those stronger-than-expected results, Levi’s share price moved lower in after-hours trading. The stock fell 3.34%, closing at $20.54 from a pre-earnings level of $21.25, and subsequently traded down to $19.68 in the latest session, reflecting investor reactions following the release.
Jefferies’ initiation frames Levi Strauss as a company leveraging channel mix and product premiumization to lift margins and returns, while recent earnings confirm the firm’s capacity to outperform consensus on key metrics. The market’s short-term reaction, however, shows volatility in investor sentiment despite the beat on results.