Levi’s stock (NYSE: LEVI)
“We anticipate a multi-year denim upgrade cycle as a result of the post-COVID-19 style shift to wider/looser silhouettes and, for women, higher waist styles. “LEVI‘s has been at the forefront of this transition, and consumers are increasingly engaging directly with the brand,” said Stifel analysts Jim Duffy and Peter McGoldrick in a note Monday.
According to Stifel, the new denim cycle is accelerating Levi’s momentum in women’s wear and direct-to-consumer engagement. According to the firm, this momentum, combined with growth from Levi’s international business and wholesale account base, should boost the retailer’s growth and profit margin.
According to Stifel, Levi’s benefits from strong brand awareness and a reputation for quality.
The firm also emphasized Levi’s leadership in sustainability among apparel companies, as well as the fact that younger customers are increasingly demanding environmental, social, and ethical business practices from the brands they buy.
The stock is up 37.05 percent, compared to a 17.02 percent increase in the S&P500.
Square stock (NYSE: SQ)
The fintech company announced on Sunday that it will acquire installment loan company Afterpay for approximately $29 billion. The deal, as well as an increase in profits in the second quarter, boosted the stock by 10% on Monday.
Cowen analysts led by George Mihalos raised Square’s stock to outperform from market perform and advised investors to “buy now.”
“Prior to the APT.AX acquisition, SQ boasted best-in-class industry growth,” the analysts wrote in a note Tuesday. “SQ’s acquisition of APT.AX opens up a slew of new growth opportunities for the company going forward.”
The firm set a price target of $343 on the stock, which is 25.9 percent higher than Square’s Monday closing price of $272.38.
Cowen anticipates that Square’s gross profit growth will exceed 30% following the acquisition.
This estimate excludes Square’s bitcoin investments, acquisition of music streaming service Tidal, and nascent decentralized finance efforts.
“In short, we believe SQ had multiple levers of additional growth not contemplated in our model prior to the acquisition, let alone the consistent upside relative to our projections over the past several quarters,” the note stated.
The stock is up 25%, while the S&P500 is up about 17%.