Beat & Raise 2Q Report Reinforces Buy Rating Conviction

研报英文原文证据摘录

Beat & Raise 2Q Report Reinforces Buy Rating Conviction

0.42

gross margin news in 3Q. 3) LEVI continues to make investments in future growth. LEVI

Q2 0.27 0.28 6 0.24

raised its FY26 EPS guidance 3% at the midpoint. We forecast the company growing EPS

Q3E 0.37 0.36 -4 0.38

13% y/y in FY26. The company is raising guidance and generating strong growth yet still Q4E 0.44 0.46 7 0.46

making incremental investments in AI, IT, DCs, and other important areas. This gives us 11/26E 1.50 1.52 2 1.50

confidence LEVI's strong growth will continue beyond FY26. 11/27E 1.70 1.70 0 1.69

11/28E 2.00 2.00 0 1.95

We raise our FY26 EPSe 2%; our FY27-FY28 EPSe are unchanged:

Jay Sole

Our FY26 EPS revision largely reflects the 4c 2Q EPS beat vs. UBSe flowing through the

Analyst

year. Our updated forecasts also consider a stronger FY26 topline outlook given the jay.sole@ubs.com

company’s momentum in US wholesale and Asia. At the same time, we expect higher +1-212-713 3559

SG&A spending to support stronger revenue growth, along with ongoing pressure on

Mauricio Serna, CFA

distribution expenses from the U.S. DC transition. From FY27-FY28, we model LEVI Analyst

delivering MSD% topline growth and ~95 bps of margin expansion on average. See mauricio.serna@ubs.com

more detail inside. +1-212-713 9028

Aditya Kulkarni

Valuation: Our PT is $34 and rating is Buy: Associate Analyst

Our $34/share PT is based on ~17x our $2.00 FY28 EPS estimate. A $34 PT puts LEVI's aditya.kulkarni@ubs.com

valuation in line with peers in terms of P/E, P/ Sales, and FCF yield (Fig. 4). Our DCF +1-212-713 1098

analysis also supports a $34/share valuation (Fig. 7).

Highlights (US$m) 11/23 11/24 11/25 11/26E 11/27E 11/28E 11/29E 11/30E

Revenues 6,179 6,032 6,282 6,761 7,107 7,520 7,869 8,176