Levi Strauss ( NYSE: LEVI ) looks less attractive into 2023, according to Goldman Sachs.
The bank’s analysts said that the North American business is likely to encounter only increasing headwinds into the new year as retailers cut back on orders. The bank expects margin pressure to increase amid wholesale markdowns into 2023 as well.
“We see elevated risk that LEVI’s growth disappoints consensus estimates into 2023,” the bank’s analysts said.
Additionally, the denim category is expected to be hit by a substitution effect to a greater extend than other apparel categories. As such, the stock was downgraded to Neutral from Buy and cut their price target to $17 from a prior $18.
Shares of the San Francisco-based company fell 1.28% after Monday's market open.
Read more on the bank’s upgrade of The Gap on Monday .
For further details see:
Goldman shifts to Neutral on Levi Strauss on margin concerns