Lovisa has announced the acquisition of 30 beeline stores in France as part of its existing agreement. This increases the estimated FY21 store count by 5%.
Given Lovisa already has 24 stores in France the additional stores should provide greater leverage in lease negotiations as well as brand awareness.
Nevertheless, Citi believes the company needs to navigate the reduced shopping centre traffic that is now a feature of the increasing shift towards online shopping.
Sales also need to be pushed along in the largest growth market, the US, where the coronavirus outbreak has had a resurgence.
As a result, the broker retains a Neutral rating and raises the target to $11.90 from $11.60.
Target price is $11.90.Current Price is $10.66. Difference: $1.24 – (brackets indicate current price is over target). If LOV meets the Citi target it will return approximately 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).