Shares of ASX-listed Lovisa Holdings Limited (AU:LOV) climbed over 7% as of writing after analyst Joseph Michael at Morgan Stanley upgraded his rating from Hold to Buy. Michael also raised his price target on LOV stock from AU$28.5 to AU$32.0, predicting around 8% upside. Morgan Stanley noted that the company’s store expansion could exceed expectations in FY25 and FY26, potentially driving a positive impact on its share price.
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Based in Australia, Lovisa is a fashion jewelery brand that caters to customers in over 30 countries worldwide.
Lovisa Earns Spot on Morgan Stanley’s ‘Key Ideas’ List
With this upgrade, Morgan Stanley added Lovisa to its ‘key ideas’ list. Notably, Morgan Stanley’s ‘key ideas’ feature small-cap and mid-cap investment opportunities backed by high earnings confidence. This week, the list was updated to include Life360 (AU:360), Corporate Travel Management (AU:CTD), Data#3 (AU:DTL), and more.
Morgan Stanley Sees Upside for Lovisa
Morgan Stanley is bullish on Lovisa’s store growth and believes that if the current pace continues, the market will respond positively. Additionally, Michael pointed out a surge in Lovisa’s January 2025 website activity, viewing it as a signal of robust store expansion.
Lastly, he highlighted that the stock’s risk-reward profile has become more appealing after experiencing a fall of over 13% over the last six months.
UBS Disagrees with Morgan Stanley’s View
Unlike Morgan Stanley, UBS is not optimistic about the pace of Lovisa’s store growth and described it as “subdued.” Earlier this week, analyst Shaun Cousins from UBS downgraded his rating on LOV stock from Hold to Sell, predicting a downside of 8%.
According to its November update, Lovisa opened 27 new stores in the first half of FY25. However, UBS stated that this was below the market expectations of 39 stores.
Are Lovisa Shares a Good Buy?
As per the consensus rating on TipRanks, LOV stock has received a Hold rating, supported by a total of eight recommendations. It includes three Buy, three Hold, and two Sell ratings. The Lovisa share price forecast is AU$28.85, which is 2% below the current price level.
