Lovisa shares: Should you buy the 2024 dip?

Lovisa Holdings Ltd (ASX: LOV) shares have had a tough start to 2024.

Since the turn of the year, the fashion jewellery retailer’s shares have lost over 8% of their value.

This means that they are now down by almost 13% on a 12-month basis.

While this is disappointing, a number of brokers appear to see it as a buying opportunity for investors.

Lovisa shares tipped as a buy

One of the most bullish brokers out there is Morgans.

Its analysts currently have an add rating and $27.50 price target on the company’s shares. This implies potential upside of 22.5% for investors over the next 12 months.

The broker is also forecasting a fully franked 3.1% dividend yield in FY 2024, which stretches the total potential return to almost 26%.

Morgans is bullish due to the company’s low price points (which help in a tough consumer environment) and its global expansion plans. In respect to the latter, last year the broker said:

LOV continues to impress us with the rate at which it opens new stores and expands into new markets. As we have said before, LOV may just prove to be one of the biggest success stories in Australian retail. LOV is showing every sign of becoming a global brand. Investment will be needed to expand LOV’s network in the US and Europe and to take it into new markets, but the company has the balance sheet capacity to fund this and the returns could be stellar.

Elsewhere, the team at Bell Potter is feeling very positive and has a buy rating and $25.00 price target on its shares. This suggests upside of approximately 11.5% for investors from current levels.

Once again, the main reason for this bullish stance is the company’s expansion plans. The broker explains:

We maintain our BUY rating as we remain constructive on the company’s ability to execute on a large and under-penetrated global roll-out opportunity as a strong player in the fashion jewellery market.

All in all, it seems that now could be a good opportunity for investors to buy (and hold) this exciting company at a good price.

The post Lovisa shares: Should you buy the 2024 dip? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa. The Motley Fool Australia has recommended Lovisa. 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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