Lovisa Holdings Ltd (ASX: LOV) shares are edging lower on Tuesday.
At the time of writing, the fashion jewellery retailer's shares are down 0.5% to $25.00.
This means that the Lovisa share price is now down approximately 35% from its all-time high.
Is this a buying opportunity for investors? Let's see what a couple of leading brokers are saying about the company.
Are Lovisa shares a bargain buy?
The good news is that both Bell Potter and Morgans believe that Lovisa shares are seriously undervalued at current levels.
For example, according to a note out of Morgans, its analysts have put an add rating and $35.00 price target on its shares. This implies potential upside of 40% for investors over the next 12 months.
It was pleased with the company's half year results and particularly the acceleration in its store rollouts. The broker explains:
The pace of store rollout has started to accelerate after a period of consolidation, notably in the US over the past two years. We believe Lovisa is poised to hit the landmark of 1,000 stores before the end of the current half, possibly by the time the outgoing CEO Victor Herrero hands over the reins on 31 May.
This underscores what we see as the most important element of the Lovisa investment case: the business has a subscale presence in almost every one of the 50 markets in which it operates and significant long-term growth potential in each. We believe the platform for long-term growth is getting stronger all the time.
Who else is bullish?
This sentiment is being echoed over at Bell Potter, where its analysts have put a buy rating and $30.00 price target on Lovisa's shares. This suggests that upside of 20% is possible from current levels.
Bell Potter highlights that its valuation is very attractive given its positive long-term growth outlook. It said:
Our Price Target is unchanged at $30.00/share given our near-term earnings revisions are broadly offset by the rolling of forward earnings into our valuation (target P/E multiple unchanged at 30x on a FY26e basis vs prev. on a blended FY25/26e basis).
We continue see catalysts in both new stores and LFL sales ahead considering the notable recovery into 2H25, higher 2H skew in Americas and healthy new openings in broader Europe (ex-UK/France/Germany). The stock continues to trade at a P/E of sub-30x on a 12-month forward basis (BPe) and we see valuation support.
All in all, this could make it an ASX share to consider buying before the market rebounds.
