LEVI STRAUSS & CO (LEVI) stock intrinsic value fair value estimate & owner earnings analysis

Screen: clean (Entity Shell Company=false in FY2025 10-K cover, DE-incorporated, no going-concern language, no VIE/PRC control structure -- China exposure is ordinary global sourcing (Bangladesh/Pakistan/Cambodia/Vietnam factories) and one of many international sales markets, not Chinese ownership; not cannabis/crypto). 10-yr owner earnings (OE = CFO - capex - SBC, per diluted share, FY2017-FY2025 from XBRL): 2017 $0.99, 2018 $0.62, 2019 $0.44, 2020 $0.73 (COVID net loss year but CFO held up on inventory/capex cuts -- not a repeatable cash source), 2021 $1.25, 2022 -$0.25 (negative -- Project Fuel distribution-center buildout spiked capex to $267M), 2023 $0.12, 2024 $1.51 (inflated by Dockers held-for-sale working-capital reclass and Project Fuel cost cuts), 2025 $0.57 (first full year post-Dockers). Two real structural breaks: (1) Project Fuel (started Q1 FY2024, now 'substantially complete' per 10-K) shifted distribution to a mixed owned/3PL model, denting 2022-23 OE via capex then boosting 2024-25 via lower restructuring/opex; (2) Dockers divestiture closed July 31, 2025, removing a lower-growth wholesale-heavy brand -- FY2025 figures are continuing-operations only. Beyond Yoga goodwill/trademark also took an impairment charge in Q3 FY2025 on soft DTC growth. Company targets returning 55-65% of adjusted FCF via dividends + buybacks (funded a $120M ASR and $30M open-market buyback in FY2025), a shareholder-friendly capital-allocation signal, but dual-class stock (Haas family control via Class B) is a governance complication. Given OE/share ranged from -$0.25 to $1.51 over 9 years with no clean trend, used a 10-yr two-stage DCF off a normalized run-rate rather than a smooth CAGR. Bear: $0.30/share OE (near FY2019/2023 trough, apparel/denim demand or promotional-pressure downside), 0% growth, 12% discount, 1.5% terminal growth -> $2.14/share. Base: $0.65/share OE (close to 9-yr and 5-yr averages, i.e. Project Fuel and Dockers-exit benefits roughly offsetting normal cyclicality), 4% growth moderating with DTC mix shift, 9.5% discount, 2.5% terminal -> $10.14/share. Bull: $0.90/share OE (near 2021 levels), successful DTC-First execution and margin expansion, 5.5% growth, 8.5% discount, 3% terminal -> $19.98/share. All cases add net cash position of -$0.49/share (total debt $1,043.0M vs cash $849.3M per Q2 FY2026 10-Q, ~392.3M diluted shares) -- Levi carries modest net debt, not net cash. The margin-of-safety price is set at a 33% discount to base ($6.80) given genuine fashion/trend and cyclical demand risk in denim/apparel, a volatile capex and working-capital history, and dual-class governance -- deeper than a flat 30% haircut but not punitive since the brand itself has a century-plus moat and management is capital-disciplined. No specific business trigger identified; this is a price-only gate. Data caveats: XBRL NetIncomeLoss (tag 73) values in the dataset stop at FY2024, so net income was not independently cross-checked for FY2025 (CFO and capex/SBC data, which drive owner earnings, were available through the FY2025 10-K and the Q2 FY2026 10-Q, so the OE calc itself is unaffected); pre-FY2017 diluted share counts were not in the XBRL pull so FY2014-2016 OE/share was not computed; long-term debt tag values show a small restatement between the FY2025 10-K ($1,050.8M) and the following 10-Q's comparative figure ($1,039.2M) -- the more recent 10-Q figure was used for the balance-sheet snapshot. At $24.30 current price, LEVI trades well above even the bull-case intrinsic value under this conservative methodology.