What to Know About Levi Strauss Stock Ahead of Earnings

LEVI has shed nearly half its value in the last year

Jul 5, 2022 at 9:57 AM

LEVI

Levi Strauss & Co. (NYSE:LEVI) steps into the earnings confessional this week. The jeanswear icon is set to report earnings after the market closes on Thursday, July 7, and ahead of the event, options bears have been growing bolder.

The stock has a rather positive post-earnings history, with five of its last eight reports resulting in post-earnings pops, including an 8.7% gap higher back in January. Overall, LEVI averages a post-earnings move of 5.1% in the last two years, regardless of direction.

Levi Strauss stock has taken a 37% haircut in 2022, carving out a channel of lower lows since toppling the $30 level nearly 12 months ago. Last seen at $15.84, downgrades could come swiftly, considering all six brokerages in coverage still maintain "buy" or better ratings.

Options traders have favored bearish bets in recent weeks, with LEVI's10-day put/call volume ratio of 0.96 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranking in the 88th percentile of its annual range. So while calls still outnumber puts on an absolute basis, the high percentile indicates the rate of put buying is elevated.

Levi Strauss stock also ranks low on the Schaeffer's Volatility Scorecard (SVS), with a score of just nine out of 100. This means the security has consistently realized lower volatility than its options have priced in, making it a potential premium-selling candidate.

Nonetheless, Levi Strauss stock now provides a low valuation at a forward price-earnings ratio of 10.70 and a price-sales ratio of 1.13. LEVI also offers a decent dividend yield of 2.5% with a forward dividend of $0.40, making the reward potential attractive for long-term and dividend investors. Moreover, the apparel business is expected conclude fiscal 2022 with 11.6% revenue growth and 5.4% earnings growth. In addition, Levis Strauss is estimated increase their revenues and earnings 7.1% and 11%, respectively, for fiscal 2023, making LEVI one of the safest investments from a fundamental point of view.

Follow @Schaeffers

You Don’t Need 25 Alerts -- You Need ONE You Can Trust!

That’s the idea behind Trade of the Week, Schaeffer’s newest trade alert.

Every Monday morning before the opening bell, you’ll receive a single, expertly researched trade recommendation -- built from the same proprietary research we’ve been using for over four decades.

It’s not just a signal.

It’s a plan designed for traders who are tired of jumping from alert to alert without ever finding their edge.

No juggling alerts. No switching directions mid-week. Just one clear, expertly researched trade idea -- delivered before the market even opens.

👉 JOIN RIGHT NOW FOR JUST $1 TO GET THE NEXT TRADE!