Jim Cramer Weighed In on the Tech Market Divide and 5 Stocks to Watch Now

3. Levi Strauss & Co. (NYSE:LEVI)

Levi Strauss & Co. (NYSE:LEVI) is among the stocks Jim Cramer discussed alongside the tech market divide. Cramer noted that “everything seems to be clicking” for the company, as he commented:

A couple of nights ago, we got another terrific quarter from Levi Strauss & Co, the denim kingpin, and its stock soared… The company’s put together a string of excellent quarters under the leadership of Michelle Gass, who took over as CEO at the beginning of 2024. The stock’s now up more than 52% over the last 12 months, but a huge chunk of that gain came yesterday when Levi’s deservedly shot up more than 10% in response to its latest results. Even here, by the way, it’s a couple of points away from its 52-week high set back in early October.

Maybe that presents a good opportunity because Levi truly seems to be on the right track here… Now, I’ve had the chance to speak with Michelle Gass several times over the past year, and every time it feels like I’m asking her how she keeps putting up such robust numbers. A lot of it comes down to solid execution and growth from new ventures… Beyond the numbers, I like the story, I just like the story of the quarter, frankly. Levi’s has bet heavily on the direct-to-consumer channel, especially the online business, and that bet is paying off. And that is a great bet… Everything seems to be clicking for Levi’s, which is finally why the company got credit for a good quarter for the first time in what feels like ages.

After taking a couple of years to get the right portfolio, invest in new areas, and generally focus Levi’s on his best opportunities, Michelle Gass has put this company in a great place, people, and that’s why the stock is roaring. I’m not saying Levi’s will… turn into another sainted apparel category stock like Ralph Lauren or Tapestry, but I will say this: Both of those stocks trade at price-to-earnings multiples in the low to mid 20s; Levi sells for just over 15 times the midpoint of this year’s fairly conservative earnings forecast while also giving you a 2.5% yield for good measure… So the bottom line: If Levi’s can keep putting up strong numbers, which I think it can, then this stock could have lots of upside ahead of it, even after it rallied more than 10% yesterday and tacked on another 4% today.

Levi Strauss & Co. (NYSE:LEVI) offers apparel and footwear for all ages under brands like Levi’s, Denizen, and Beyond Yoga.