LEVI Attracts Bull Notes After Earnings, Revenue Beat

Options traders are blasting the security in the options pits

Digital Content Manager
Jul 9, 2021 at 10:48 AM
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Apparel retailer Levi Strauss & Co. (NYSE:LEVI) is up 1.6% at $28.46 this morning, after the company reported second-quarter earnings of 23 cents per share -- substantially higher than Wall Street's estimates of 9 cents per share -- in addition to a revenue beat. The company also forecast a stronger-than-expected full-year forecast, thanks to a quicker-than-expected rebound in demand for jeans, tops, and jackets as customers refresh their wardrobes amid easing pandemic restrictions.

The brokerage bunch is responding to the news with optimism. At least four analysts upped the security's price target this morning, including a significant hike from Evercore to $40 from $36. That's noteworthy considering analysts were already optimistic towards LEVI, with all four in coverage carrying a "buy" or better, while the stock's 12-month consensus target price of $34 now sits at a 15.5% premium to current levels.

The options pits have been echoing that bullish sentiment. This is per the equity's 50-day call/put volume ratio of 8.21 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands in the 78th percentile of its annual range. Echoing this is LEVI'S Schaeffer's put/call open interest ratio (SOIR), which sits at the very bottom of readings from the past year. In simpler terms, both short- and long-term options traders have rarely been more call-biased.

Drilling down to today's options activity, over 16,000 calls and just over 2,000 puts have already crossed the tape, call volume that's 15 times what is typically seen at this point. Most popular is the July 30 call followed by the August 30 call, with new positions being opened at the former.

On the charts, Levi stock is trying to climb back to its May 4 all-time high of $30.82. Now on track for its highest close since May 17, LEVI is eyeing its third-straight win while sporting a 125.3% year-over-year lead.


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