LEVI Stock Inches Lower After Earnings

The Wrangler jeans maker reported a decline in American wholesale business

Deputy Editor
Oct 9, 2019 at 9:22 AM
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The shares of denim maker Levi Strauss & Co. (NYSE:LEVI) are slightly lower after last night's earnings report. The firm reported third-quarter profits of 31 cents -- beating analysts' estimates of 28 cents per share -- and revenue of $1.45 billion, which also exceeded expectations. LEVI did report a decline in American wholesale business, however, which lead to a 4% drop in profit for the quarter. The stock is down 0.2% at $18.92.

Despite a recent pullback, the equity has been running higher since its mid-August low of $16, with its rising 20-day moving average acting as a recent floor -- a trendline LEVI is testing today. The security has managed to add almost 20% since this bottom, but is still down 15.6% year-to-date. 

Analysts have yet to chime in, but prior to today, the brokerage bunch has been quite bullish. The stock's consensus 12-month target price of $22.71 is at a healthy 19.5% premium to current levels. Plus, all but one of the six analysts in coverage call the security a "strong buy."

Short sellers, on the other hand, have been betting on more downside, with short interest up 23% in the last two reporting periods. The 5.33 million shares sold short represent a solid 12.8% of the stock's available float, too, and would take nearly four days to cover at LEVI's average pace of trading. 

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