Own Lovisa shares? Why this broker believes the retailer could be a 'global force'

Is Lovisa going to be a global force?

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The Lovisa Holdings Ltd (ASX: LOV) share price was on form on Monday.

The fashion jewellery retailer's shares started the week with a 2.5% gain to $16.09.

Can Lovisa's shares keep rising?

The good news is that the Lovisa share price could have significant room to climb from current levels.

According to a note out of Morgans from last week, its analysts have an add rating and $21.50 price target on the company's shares.

Based on where Lovisa's shares currently trade, this implies potential upside of ~34% for investors over the next 12 months.

Morgans is bullish on the company due to its belief that it could become a "global force."

'A global force'

Under the leadership of its relatively new and highly experienced CEO, Victor Herrero, the broker believes that Lovisa has a huge growth opportunity globally.

It explained:

Lovisa's global footprint now spans 22 countries. In our opinion, investors can expect this number to increase steadily while, at the same time, Lovisa builds out its presence in its existing markets. We do not think there is any lack of opportunity.

In the US, for example, Lovisa now has 81 stores, representing 0.25 stores for every million people), compared to Australia with 158 stores, 6.15 stores for every million people. Given Mr Herrero is well-incentivised to grow Lovisa's EBIT rapidly over the next three years, and has already appointed senior former Inditex executives to his regional team, we could be at the start of a period of remarkable expansion.

In light of this, Morgans believes Lovisa could become one of the biggest success stories in Australian retail.

LOV may just prove to be one of the biggest success stories in Australian retail. With ambitious (and financially well-incentivised) new leadership in place, we think now is the time LOV steps up to become a global force.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Lovisa Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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