Levi Strauss Shares Plunge 12% Following Earnings Report Concerns

Levi Strauss & Co (LEVI) shares fell nearly 12% in afternoon trading on Friday after the company released its third-quarter earnings report, which raised concerns among investors regarding future margins. Despite exceeding expectations in its earnings, analysts expressed apprehension about the company’s conservative outlook and spending patterns leading into 2026.

According to JPMorgan, Levi Strauss reported a “beat and raise” quarter, with fiscal 2025 adjusted earnings per share forecasted to be between $1.27 and $1.32, slightly up from the previous estimate of $1.25 to $1.30. Nevertheless, JPMorgan adjusted its price target for the company from $23 to $33, indicating a cautious view on the stock’s future performance.

Concerns were echoed by Wells Fargo, which noted uncertainties surrounding Levi’s near-term outlook and spending trends. The firm maintains an ‘Overweight’ rating on the stock with a price target of $25. Following the earnings call, retail sentiment remained strong, categorized as ‘extremely bullish,’ with message volumes on platforms like Stocktwits reaching high levels.

In a further display of confidence, UBS raised its price target on Levi Strauss from $28 to $32, reaffirming a ‘Buy’ rating. The firm highlighted the company’s strategy to evolve into a global, multi-channel lifestyle brand for both men and women, a move expected to bolster market share in the long term. CEO Michelle Gass emphasized during the earnings call that the total addressable market for denim is expanding as consumer preferences shift towards casual wear.

While Morgan Stanley raised its price target slightly from $19 to $20, it maintained an “Equal Weight” rating. Analysts cited a “fair” after-market valuation and uncertainty surrounding earnings per share for 2026 as reasons for this cautious stance.

Despite the recent downturn, Levi Strauss shares have shown resilience, with a 25% increase this year and over 13% growth in the past twelve months. As the company navigates market challenges, analysts will closely monitor its performance and strategic initiatives in the coming quarters.