Levi Strauss Q2: Not Bad Despite The Market Reaction, Still Optimistic And A Hold

Not too bad but disappointing 2Q24 results Finally, we have the issue of multiple contraction. The above return of 10% is based on Levi's P/E multiple remaining at 15x or above. Otherwise, the gain from expanding earnings would be negated by a falling multiple, potentially leading to share price declines. If, for example, after Levi provides a 40% earnings growth, the market expects it to grow less in the future, and the multiple moves to say, 12x, our return over the holding period would contract by 20% at ...