Investing.com -- Bank of America upgraded Levi Strauss & Co (NYSE:LEVI) to “Buy” from “Neutral,” saying the denim maker checks several positive boxes including global brand strength, improving wholesale trends, and limited exposure to China.

The firm raised its price objective to $20 from $17, implying roughly 20% upside.

Shares are down 38% from last year’s highs, but BofA said the risk-reward looks favorable at 6x estimated 2026 EV/EBITDA.

LEVI is showing solid sales momentum and has a conservative outlook, minimal China risk, and a strong balance sheet, analysts wrote in a note.

The bank sees potential upside to Levi’s fiscal 2025 guidance, which calls for 3-4% net organic sales growth despite 9% growth in Q1. Trends improved in March, and BofA said the brand is gaining traction both in core denim and its expanding lifestyle categories.

Levi’s wholesale business is also showing signs of strength, with two straight quarters of U.S. growth and improving order books in Europe.

Department stores now account for just 7% of sales, down from 14% a decade ago, reducing exposure to weaker channels.

While macro uncertainty clouds the gross margin outlook for the second half, BofA believes recent tariff delays are a near-term positive.

Even if tariffs return, Levi is well positioned given its diversified supply chain and minimal China production.

The firm also highlighted Levi’s global brand appeal, noting that the company is still in early stages of expanding into non-denim apparel.

BofA sees long-term structural margin improvement potential, supported by strong brand heat and diversification, according to the note.