Lovisa Holdings Ltd (ASX: LOV) shares have been on a tear over the last 12 months.
During this time, the fashion jewellery retailer's shares are up 43%.
And if you were fortunate enough to buy at the bottom in October, you would be up almost 90% on your investment.
But with its shares trading within sight of record highs, are the gains coming to an end now?
Maybe not.
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Can Lovisa shares keep rising?
One broker that remains positive on the company and sees meaningful upside for investors is Morgans.
Last month, in response to its half-year results, Morgans reaffirmed its add rating with an improved price target of $35.00.
Based on its current share price of $31.68, this implies potential upside of 10.5% for investors over the next 12 months.
In addition, the broker is forecasting fully franked dividends of 83.4 cents per share in FY 2024 and 85 cents per share in FY 2025.
This implies a fully franked dividend yield of 2.6% for investors between now and this time next year, which boosts the total potential return to approximately 13%.
What did the broker say?
Commenting on Lovisa's half-year result, which "surpassed expectations", the broker said:
LOV is democratising jewellery. Its fashionable and attractively priced products are reaching and appealing to a larger and larger global audience. LOV has operations in over 40 markets and substantial white space to expand in almost all of them. The 1H24 result surpassed expectations, mainly due to strong gross margins, which were supported by favourable changes to the price architecture.
And while this has led to a modest increase to its earnings estimate for FY 2024, the broker believes investors should focus less on this year and more on its very bright long term outlook. It adds:
We have increased our EBIT estimate for the current year by 4%, but, for us, it's not about the near-term. The investor should focus on what this business could develop into in the years ahead. We reiterate our Add rating and increase our target price.
Overall, the broker doesn't appear to believe that it is too late to invest, which could make it worth a closer look. Especially given its extremely positive view on the company's long-term growth potential.
