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Investing.com - UBS upgraded Lovisa Holdings Ltd (ASX:LOV) stock rating from Sell to Neutral and raised its price target to AUD30.00 from AUD26.00.
The upgrade comes as Lovisa’s store growth has accelerated in recent weeks, particularly in Europe, addressing a key concern that had previously supported UBS’s Sell rating. Store expansion had slowed following the company’s strong fiscal year 2023, when it added 172 locations.
The introduction of Lovisa’s new Jewells format provides additional scope for greater store and sales growth, according to UBS. The firm also cited increased confidence following the appointment of Mark McInnes to the Executive Deputy Chairman role, complementing John Cheston as Global CEO.
UBS revised its fiscal year 2025/2026/2027 estimates by -2.8%/+2.8%/+5.5%, reflecting higher store numbers for both Lovisa and Jewells formats, partially offset by expected start-up losses in the Jewells business.
Despite ongoing concerns regarding U.S. tariffs—Lovisa sources 78% of its products from China while the U.S. represents 22% of first-half 2025 stores—and competition from HARLI + HARPA potentially moderating same-store sales recovery, UBS now views the risk-reward profile as more balanced.
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