Q2 STOCKS TO BUY

LEVI Moves Lower Despite Announcing 700 Job Cuts

Analyst sentiment surrounding the stock is optimistic, however

Digital Content Manager
Jul 8, 2020 at 11:18 AM
facebook X logo linkedin


The shares of Levi Strauss & Co. (NYSE: LEVI) are down 6.6% at $13.83 this morning, even after the iconic denim retailer announced late on Tuesday it would cut around 700 jobs in non-retail and non-manufacturing segments, or roughly 15% of its workforce, to save $100 million annually. The company also cautioned its business would take yet another hit on the second half 2020, despite an increase in sales as stores across the country reopen after coronavirus lockdowns. 

On the charts, LEVI has been working to recover from its all-time-low of $9.09 on April 3. The equity has chopped higher since then, with its 40-day moving average serving as both support and resistance over the past few months. However, although the shares rallied to the $16 level mark in early June, the equity has found overhead pressure at the $14 area in recent weeks. Longer term, Levi's stock continues to suffer, and is down 45.5% year-over-year.

Nonetheless, analysts were majorly optimistic toward the equity coming into today. Of the seven in coverage, five called it a "strong buy," and only two carried a tepid "hold" recommendation. Meanwhile, the consensus 12-month price target of $16.89  is a whopping 31.8% premium to current levels, meaning price target cuts could be in store for LEVI in the near future.

Shorts sellers are singing to a different tune, however. Short interest rose 4.4% in the most recent reporting period, and the 7.16 million shares sold short make up roughly 17% of LEVI's available float. In other words, it would take almost a full week for shorts to buy back these bearish beats. What's more, Levi stock's Schaeffer's put/call open interest ratio (SOIR) comes in at 1.10. This ranks in the 89th percentile of readings from the past 12 months -- indicating an appetite for puts over calls among short-term speculators.

That sentiment is echoed in the options pits, where puts are also preferred. LEVI sports a 10-day put/call volume ratio of 1.18 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than 81% of readings from the last year, suggesting a much healthier appetite for puts than what is typically seen. 

 
 

“Buy This Stock Now!” - Expert Who Called 11x On TSLA

He called a rare 11x on Tesla…

But now, thanks to Elon & Trump’s new alliance…

He says there’s a new opportunity that could be 1,000x BIGGER than Tesla – and it could completely revolutionize a $23 Trillion market.

It’s trading for less than $5 per share right now…

But it won’t be under the radar for long.

Discover The 1,000x Bigger Elon Opportunity Here

GRAND SLAM COUNTDOWN

 
 

Featured Articles from Trusted Partners:

👀Learn How Dividends Create Passive Income for Life
Receive $200 Off Motley Fool Epic. The Motley Fool Epic $299 discounted offer is based on $499/year list price. Introductory promotion for new members only. Take control of your money and your portfolio with Motley Fool Epic.

💵New Income System Could Pay You $4,243 Monthly
You could collect an average of $4,243 per month starting as early as next week with a new payout system for income investors. New registrations are being accepted for investors who want to be in a position to start with their first payout next week.

🚀Easy 92% Crypto Dividends (No Coins Required)
COIN stock doesn't pay a dividend... But there's actually a new way to collect a massive dividend that's indirectly based on the stock and offers a terrific monthly income (currently yielding nearly 92% on a forward basis).

🤝Free Advisor Match with Wiseradvisor.com
Don't leave your retirement to chance! Get matched with a trusted financial expert for FREE and make the most of your tax refund. Get started now.

⚠️Dennis Quaid's #1 Warning for Americans
Here's the thing: life doesn't come with guarantees. The economy shifts, markets stumble, and years of hard work could slip through your fingers like sand. But it doesn't have to be that way for you. So request a free copy of this Gold & Silver Guide that will arrive right to your doorstep when you act now.

 

 
 

Follow us on X, Follow us on Twitter