The market may be dropping lower today but that hasn't stopped the Kogan.com Ltd (ASX: KGN) share price from pushing higher.
In afternoon trade, the e-commerce company's shares are up 1.5% to $16.89.
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Why is the Kogan share price pushing higher?
The Kogan share price appears to be charging higher today on the belief that the COVID-19 lockdown in Victoria will give the company's sales a boost.
This afternoon, the Victorian government announced that it would be locking down the state for five days from midnight tonight. This action is being taken in an effort to stop the spread of a highly transmissible strain of COVID-19.
During previous lockdowns, online retailers such as Kogan and Temple & Webster Group Ltd (ASX: TPW) performed very strongly as investors were forced to do their shopping online.
Should you buy?
A five-day lockdown isn't going to make a huge difference to Kogan's full-year sales, so investors may not want to make an investment decision based purely on that.
Though, one broker that was already recommending investors to buy Kogan shares was Credit Suisse. Earlier this month, the broker retained its outperform rating and increased its price target on Kogan shares to $21.08.
Based on the current Kogan share price, this price target implies a potential upside of almost 25% over the next 12 months.
According to the note, the broker was pleased with Kogan's half-year update and appears confident there will be more strong growth ahead for the company.
This is because it believes Kogan is well-placed to benefit from the increasing shift to online shopping. This is particularly the case given the expansion of Kogan's product range and its recent $122 million acquisition of New Zealand-based online retailer Mighty Ape.
Mighty Ape operates online stores in New Zealand and Australia and has a focus on gaming, toys, and other entertainment categories. It currently has 719,000 active customers, bringing the company's total to over 3.7 million.
Following today's gain, the Kogan share price is now up 231% in 12 months.
