Lovisa Holdings Ltd (ASX: LOV) shares have tumbled in the past month, but could the company's fortunes turn around?
The jewellery retailer's shares closed at $13.10 each on Monday, 1.63% higher. For perspective, the S&P/ASX 200 Index (ASX: XJO) fell 0.62% today.
Let's check the outlook for Lovisa shares.
Significant upside
Lovisa shares have plunged nearly 17% since market close on 20 May. However, analysts at Morgans are tipping the company's shares could skyrocket in the future.
The broker has placed an add rating on Lovisa with a $24 price target. That's an 87% upside on the current share price.
It seems Morgans is optimistic about Lovisa's prospects due to the company's global expansion plans.
Analysts said the company could "prove to be one of the biggest success stories in Australian retail".
In a recent market update, Lovisa revealed it has opened a net total of 59 stores year to date. While 14 stores have closed, 73 new stores have opened.
Since 2020, Lovisa has increased its presence by 168 stores. This includes 87 in Europe, acquired via its Beeline takeover.
In Europe overall, Lovisa has 163 stores while the company is also trading in 31 US states.
The company's revenue in the first half of FY22 boomed 48.3% to $217.8 million, while gross profit surged 50.5% to $170.7 million.
Monash investors co-founder Simon Shields recently tipped Lovisa's retail share network could grow from 550 stores to 2000 in the next seven to eight years. Commenting on this outlook, Shields said:
The earnings numbers will go up and the share price will follow.
Share price snapshot
The Lovisa share price has descended 13% in the past year. In the year to date, it has plummeted 36%.
For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has also lost nearly 13% in the past 12 months.
Lovisa has a market capitalisation of nearly $1.4 billion based on the current share price.
