What Happened?
Shares of denim clothing company Levi's (NYSE:LEVI) jumped 3.2% in the afternoon session after BofA Securities raised its price target on the stock, citing strong demand for denim. The investment firm lifted its price target on Levi Strauss & Co. to $27 from $26, while maintaining its 'Buy' rating. Analysts at BofA pointed to the strength in the denim category and the brand's expanding global appeal as key reasons for their positive outlook. The firm also noted it expects positive earnings per share momentum for the company. This optimism aligns with broader trends in the apparel sector, where other major players have also recently reported strong growth, signaling healthy consumer demand.
After the initial pop the shares cooled down to $24.30, up 4.4% from previous close.
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What Is The Market Telling Us
Levi’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock dropped 13.2% on the news that President Trump announced "reciprocal tariffs" on all US imports, set at a minimum rate of 10%. From clothing brands and electronics makers to the e-commerce sites that move their goods, companies built on global supply chains took the biggest hit. Stocks with heavy exposure to Asia were especially hard-hit, as the new tariffs threatened the growth and profits of firms with factories in the region. Vietnam, central to many companies' production plans, faced a 46% tariff. Cambodia and Indonesia were also in the crosshairs, with tariff rates of 49% and 32%. These measures could significantly erode the competitiveness of goods produced in those regions. For example, reduced production volumes would negatively affect the sales growth of all companies benefiting from these manufacturing hubs.
Levi's is up 39.5% since the beginning of the year, and at $24.30 per share, has set a new 52-week high. Investors who bought $1,000 worth of Levi’s shares 5 years ago would now be looking at an investment worth $1,744.
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