• Investors may be wondering whether Levi Strauss shares at around US$22.90 still offer value after a strong run, or if most of the potential upside is already reflected in the price.
• The stock has recent returns of 0.7% over 7 days, 23.8% over 30 days, 10.0% year to date and 60.8% over 1 year, alongside a 3-year return of 67.7% and a 5-year return of a 12.0% decline.
• Recent coverage has focused on Levi Strauss as an established global denim and apparel brand, with attention on how it has managed its product mix, wholesale relationships and direct-to-consumer presence. This context helps frame why investors are reassessing the balance between brand strength, execution and the current share price.
• Levi Strauss currently has a valuation score of 5 out of 6. The rest of this article will walk through what different valuation methods indicate about that number, before finishing with a broader way to think about what the stock might be worth.

Approach 1: Levi Strauss Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a business could be worth today by projecting its future cash flows and discounting them back to the present using a required rate of return.

For Levi Strauss, the model uses last twelve month Free Cash Flow of about $440.1 million and a 2 Stage Free Cash Flow to Equity approach. Analysts provide forecasts for the next few years, and Simply Wall St extends these out to 10 years. On this basis, projected Free Cash Flow for 2028 is $659.0 million, with later years reflecting further extrapolated growth assumptions.

When all those projected cash flows are discounted back and combined with a terminal value, the model arrives at an estimated intrinsic value of about $30.31 per share. Compared with a current share price around $22.90, this DCF output suggests Levi Strauss trades at roughly a 24.4% discount, which indicates the shares screen as undervalued on this method.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Levi Strauss is undervalued by 24.4%. Track this in your watchlist or portfolio, or discover 59 more high quality undervalued stocks.

Approach 2: Levi Strauss Price vs Earnings

For profitable companies, the P/E ratio is a straightforward way to connect what you pay per share with the earnings that support that price. This makes it a useful cross check on the DCF work you saw earlier.

In simple terms, higher expected earnings growth and lower perceived risk usually justify a higher P/E, while lower growth and higher risk tend to line up with a lower, more cautious P/E. The challenge is knowing what “normal” looks like for a specific business.

Levi Strauss currently trades at about 16.3x earnings. That sits below the Luxury industry average P/E of around 20.1x and also below the peer group average of about 59.6x. On the surface, that suggests the market is applying a lower multiple than it does to many comparable names.

Simply Wall St’s Fair Ratio for Levi Strauss is 21.0x. This is its estimate of an appropriate P/E once factors like earnings growth, industry, profit margins, market cap and risk profile are taken into account. Because this Fair Ratio is tailored to the company’s own fundamentals, it can be more useful than simply lining the stock up against broad industry or peer averages.

Compared with the Fair Ratio of 21.0x, the current P/E of 16.3x points to Levi Strauss trading below that company specific reference point. This suggests the shares screen as undervalued on this method.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Levi Strauss Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives are introduced here as a simple tool on Simply Wall St’s Community page that lets you connect your own story about Levi Strauss to specific forecasts for revenue, earnings and margins, compare the Fair Value that falls out of that story with the current share price, and see in real time how bullish views that point to a Fair Value around US$32.66 and bearish views closer to US$23 sit alongside a lower bearish price target of US$14. Each Narrative updates automatically as new news, earnings or guidance is released so you can decide for yourself whether Levi Strauss looks closer to a buy, a hold or a sell under the assumptions you find most reasonable.

Do you think there's more to the story for Levi Strauss? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.