Levi Strauss Stock Set to Reach New Highs in 2026

Levi Strauss (NYSE: LEVI) is on track to hit new highs in 2026, as the enduring, globally recognized brand is in the midst of a sales recovery. Management is effecting a strategic transformation that centers on direct-to-consumer, omnichannel, and e-commerce, driving industry-leading sales growth for core brands and widening margins despite macroeconomic headwinds. Among the critical takeaways is that Levi Strauss produces healthy cash flow, maintains a fortress-like balance sheet, and returns capital to shareholders, too, making it an attractive play for income-oriented investors. 

Levi Strauss’s capital return is attractive and was amplified in 2025. The company entered into an accelerated share repurchase program during Q3 due to strong performance and the impact of a divestiture. The ASR is worth approximately 1.2% of the company's market cap with shares near $24.50, and is expected to be completed before the fiscal year’s end. Once completed, the company will have $440 million left under its standard authorization, allowing it to continue reducing its share count in future quarters. 

The capital return includes dividends, and they are worth noting. The dividend annualizes to over 2.25% in early October, is reliable, and expected to grow. The 56-cent annualized payment indicated for FY2025 is approximately 41% of the earnings outlook, supported by healthy, improving cash flow and a fortress-like balance sheet. 

The balance sheet highlights reflect the divestiture of Dockers, with all details favoring shareholders. The minor increase in long-term debt left leverage at less than 0.5x equity and under 2x cash, with cash and asset increases more than offsetting them. The net result is a nearly 10% increase in shareholder equity in addition to the reduced share count and dividend payment. 

Levi’s Stock Price Pulls Back Despite Beat-and-Raise Quarter

Levi had a solid quarter with ongoing business outperforming industry peers. The company’s core, Levi’s business, grew by 6.9%, outpacing MarketBeat’s reported consensus by 265 basis points. The company reported strengths in all channels, segments, and categories, with Asia leading at 12% growth, followed by 6% in the Americas and 5% in Europe. Direct-to-Consumer was a growth driver, up 9% organically, driven by a 16% increase in e-Commerce, which accounted for 46% of net. 

Higher prices are part of the mix, increased to offset tariffs, and the impact is noticeable, amplified by channel mix and improved sales leverage, resulting in a 100 bps improvement in gross margin and nearly 900 bps in operating margin. The net result is $0.34 in adjusted earnings, up 3% year-over-year, 1000 bps better than expected, and improved full-year guidance.

Levi’s guidance is favorable to the market. The company raised its revenue, organic sales, and margin estimates, increasing the midpoint of its EPS range by 2 cents to a level above the consensus, which should sustain the bullish analyst sentiment trend.

Analysts Are Bullish on Levi Strauss: Institutions Will Likely Buy the Dip

Analysts and institutional investor trends are bullish, suggesting these groups will buy LEVI stock on the dip. The analysts' trends include increased coverage, a firm Moderate Buy rating, and a rising price target. The consensus lags the market in mid-October but is up significantly over the preceding 90-day period, with the high end of the range reaching $32.

According to MarketBeat data, institutions have been consistently buying on balance every quarter in 2025, accumulating over $2 in shares for every $1 sold, which offers strong support for this market. 

The technical action is bearish following the release. The market sold off by more than 8% in pre-market trading, creating a buying opportunity for investors. The question is how deep the stock price may fall, and it may not go much further.

There is a strong support target near $21.70, which is likely to trigger a rebound. If not, LEVI could fall to a multimonth low before hitting solid support, regaining traction, and resuming the stock price advance. 

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The article "Levi Strauss Stock Set to Reach New Highs in 2026" first appeared on MarketBeat.