Levi Strauss & Co. (LEVI) shares took a nosedive on Thursday following the release of the company’s third-quarter earnings report, which revealed disappointing revenue figures. The company reported quarterly revenue of $1.516 billion, falling short of the consensus estimate of $1.55 billion. This shortfall was attributed in part to the company’s decision to exit the Denizen business.
Adding to the woes, Levi Strauss also announced its exploration of strategic alternatives for the global Dockers brand, which could potentially lead to a sale. CEO Michelle Gass explained during a post-earnings call that the company is focusing on maximizing the potential of the Levi’s brand and accelerating the growth of Beyond Yoga.
Despite the challenging news, the company offered fiscal 2024 earnings guidance, albeit with a midpoint below analyst expectations. Levi Strauss anticipates earnings between $1.17 and $1.27 per share for the year, compared to the consensus estimate of $1.25.
While the news sent shockwaves through the market, some analysts maintain a positive outlook on the company’s future. Stifel analyst Drew Crum kept his Buy rating on LEVI stock but lowered the price target from $28 to $25. Telsey Advisory Group also maintained its Outperform rating and $26 price target.
The decision of whether to sell or hold LEVI stock ultimately depends on an investor’s individual strategy and risk tolerance. Swing traders might opt to sell an outperforming stock to secure a profit, while long-term investors might prefer to weather the storm and hold on for potential future growth. Traders seeking to minimize losses might sell a stock that drops below a certain threshold, while long-term investors could see this as an opportunity to buy more shares at a discounted price.
Year-to-date, shares of Levi Strauss have climbed by 48.15%. This surpasses the average annual return of -3.24%, indicating that the stock has outperformed its historical averages. Investors can compare a stock’s current movement with its historical performance to assess whether it’s a normal fluctuation or a potential trading opportunity.
Investors may also consider broader market dynamics when making investment decisions. The Relative Strength Index (RSI) is a tool used to gauge whether a stock is overbought or oversold. Levi Strauss stock currently has an RSI of 56.58, which suggests neutral conditions.
At the time of publication on Thursday, shares of Levi Strauss & Co were down 7.22% at $19.54.
