Bank of America pounded the table on its bullish view of Levi Strauss & Co. ( NYSE: LEVI ) just ahead of the apparel company's earnings report on October 6.
Crucially for the stock, BofA thinks market concerns regarding a structural shift out of denim are overblown.
Analyst Christopher Nardone and team view LEVI as a best in class brand with a compelling strategy around the shift to direct to consumer. They also see a solid runway for LEVI to expand market share in both denim and non-denim categories.
On valuation, BofA noted that the stock is trading at an attractive multiple of 6.7X the firm's 2023 EV/EBITDA estimate, which in itself is 9% below the consensus mark.
BofA has a Buy rating on LEVI and price objective of $20 to rep more than 40% upside potential for shares.
Read the latest breakdowns on LEVI from Seeking Alpha authors.
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Levi Strauss is recommended by Bank of America just ahead of earnings