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Cramer Likes Levi's Stock, Just Not At Current Levels

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Cramer Likes Levi's Stock, Just Not At Current Levels

Levi Strauss (NYSE: LEVI) ended Thursday's session with a 31-percent gain and investors are encouraged not to chase the stock at current levels, according to CNBC's Jim Cramer.

What Happened

Levi's returned to the public markets Thursday after decades of operating as a private company. The company boasts multiple high-quality brands including Dockers and Denizen and has seen years of momentum since Chip Bergh took over as CEO in 2011, Cramer said during his daily "Mad Money" show Thursday evening.

Despite doing a "great job in a tough business" shares of Levi's are "already up enormously" after just one day of trading, Cramer said. Investors lucky enough to get in from the beginning are sitting on a "really good win." Everyone else looking to buy the stock at current levels needs to ask if it is a good buy at around $22 per share.

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Related Link: Levi Strauss CEO Talks IPO: 'This Brand Stands For Everything Good About America'

Why It's Important

The most important consideration in buying a new stock is the numbers that drive shares. The company said in its prospectus it expects to show 5.7 percent to 6.8 percent revenue growth, which is "very meaningful" for an apparel company but also implies a "meaningful slowdown" from 2018's nearly 14-percent growth.

Shares of Levi's are also trading at more than 20 times last year's earnings estimates which isn't particularly expensive, Cramer said. Compared to its peers like Ralph Lauren Corp (NYSE: RL) and Guess? Inc. (NYSE: GES), however, it's trading at a premium valuation.

What's Next

Levi's stock is worth buying "at some price" in the future, just not at its current levels, Cramer said. If shares pull back to $20 per share, that represents a level where investors may want to consider buying the stock.

Levi's stock traded around $23.11 per share Friday morning.

Posted-In: Chip Bergh CNBC Denizen Dockers Jeans Jim CramerIPOs Media Best of Benzinga

 

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