The market may be sliding lower today but the same cannot be said for the Lovisa Holdings Ltd (ASX: LOV) share price.
In early trade, the fashion jewellery retailer's shares were up as much as 7% to a record high of $23.07.
At the time of writing, the Lovisa share price is up 5% to $22.75.
Why is the Lovisa share price outperforming?
Investors have been bidding the Lovisa share price higher today after it was the subject of a bullish broker note out of Macquarie Group Ltd (ASX: MQG) this morning.
According to the note, the broker has upgraded the company's shares to an outperform rating and lifted the price target on them by an enormous 47% to $25.00.
Based on the current Lovisa share price, this implies potential upside of 10% even after today's gains.
Why did the broker upgrade its shares?
Macquarie notes that Lovisa has recently announced the appointment of its new CEO, Victor Herrero. He will be replacing Shane Fallscheer, who is stepping down after 12 years leading the company.
Mr Herrero is a very experienced executive. He was previously the Head of Asia Pacific and Managing Director Greater China for Inditex (Zara, Pull & Bear and Massimo Dutti), the CEO of Guess, and the CEO of Clarks.
Macquarie is a big fan of the appointment and notes that Mr Herrero has experience growing brands and stores in China and India, which will be a key focus for Lovisa. In fact, the broker sees scope for the company to open as many as 1,400 stores in these markets alone. This provides Lovisa with a significant growth runway over the next decade and beyond.
It is because of this, together with greater confidence in its store rollout in existing markets, that Macquarie believes Lovisa's shares deserve a rerating.
The Lovisa share price is up almost 100% in 2021 following today's gain.
