Investing.com – Levi Stauss on Tuesday made it on the list of fashionable investing at Macquarie, who hailed the denim maker’s efforts to make its brand more appealing to women and millennials.
Macquarie initiated coverage on Levi with an overweight rating, highlighting the denim maker’s “great” job of reinventing itself, with a move beyond its core mens jeans business, which makes up nearly 70% of sales. Levi Strauss (NYSE:) rose 2.9% by 1:57 p.m. ET (17:57 GMT).
“Levi’s has always prided itself by being at the forefront of innovation. This is important, as research has shown that companies with higher R&D spend will outperform in the long term,” the bank said in a note to clients. “As such, innovation is one of the key tenets behind our outperform thesis on Levi’s,” it added.
With women and millennials in its crosshairs, Levi’s has “significant” opportunity to diversify its revenue base by geography, by channel and by gender, Macquarie suggested.
In the recent past, however, Levi has come under fire from some on Wall Street, who worry the company is vulnerable to the weaker backdrop for department stores, which brands like Levi’s rely on to flog merchandise.
To wean itself off its department-store dependence, the demin maker has been spending big to accelerate its direct-to-consumer approach.
Levis rose 2%, but is roughly unchanged from its IPO price of $17.
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