If you're interested in buying growth stocks, then Lovisa Holdings Ltd (ASX: LOV) shares could be worth considering.
That's the view of analysts at Morgans, which are extremely bullish on the fast-fashion retailer.
Why is it bullish on Lovisa shares?
According to a note, Morgans has been very impressed with the company's global expansion and particularly the rate in which it is opening new stores.
Another positive is that the company's younger target demographic is likely to be less exposed to rising interest rates. This means the company should be better positioned during the cost of living crisis. Morgans commented:
Lovisa is, in our opinion, a phenomenon. The business rolled out more stores in 1H23 than it did in the whole of the previous year and is laying down markers in multiple new global markets, creating a foundation for long-term network expansion. Lovisa's customer is likely to be more resilient than those pre-occupied with inflation in household expenses.
The good news is that the broker believes Lovisa's store expansion is only getting started thanks partly to its "ambitious and well-incentivised new leadership."
In fact, Morgans suspects that "now is the time LOV steps up to become a global force." It adds:
LOV has accelerated its organic rollout in the US and entered into a number of new markets, including Hong Kong, Mexico, Italy, Columbia and Peru. We believe it is poised to enter both Vietnam and Taiwan in coming months. Investment will be needed to expand LOV's network in the US and Europe and to take it into new markets, but the returns could be stellar. We think LOV's products fill an underserved niche, offering fast fashion jewellery at prices that are attainable to a resilient target demographic.
Is now a good time to buy?
Morgans currently has an add rating and $29.00 price target on the company's shares.
Based on the latest Lovisa share price of $24.49, this implies potential upside of over 18% for investors over the next 12 months.
