What Happened?
Shares of denim clothing company Levi's (NYSE: LEVI) fell 12% in the morning session after the company's full-year profit forecast, while raised, came in just shy of Wall Street's expectations, overshadowing an otherwise strong quarterly report. The denim maker reported third-quarter revenue of $1.54 billion and adjusted earnings of $0.34 per share, beating analysts' estimates on both fronts as sales grew 7% year over year. However, investor focus shifted to the company's outlook. Although Levi's raised its adjusted earnings per share guidance, the new midpoint of $1.30 fell just below the consensus estimate. The market's negative reaction indicated that the solid quarterly performance was not enough to outweigh concerns that future profitability would not meet Wall Street's higher expectations.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Levi's? Access our full analysis report here.
What Is The Market Telling Us
Levi’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. Moves this big are rare for Levi's and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 9 days ago when the stock gained 3.2% on the news that 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.
Levi's is up 24.6% since the beginning of the year, but at $21.71 per share, it is still trading 12% below its 52-week high of $24.66 from October 2025. Investors who bought $1,000 worth of Levi’s shares 5 years ago would now be looking at an investment worth $1,374.
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