Lovisa Holdings Limited (ASX:LOV) Just Reported And Analysts Have Been Lifting Their Price Targets

Shareholders of Lovisa Holdings Limited (ASX:LOV) will be pleased this week, given that the stock price is up 18% to AU$41.83 following its latest annual results. It was a pretty mixed result, with revenues beating expectations to hit AU$798m. Statutory earnings fell 4.5% short of analyst forecasts, reaching AU$0.78 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the current consensus from Lovisa Holdings' 15 analysts is for revenues of AU$947.3m in 2026. This would reflect a meaningful 19% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 25% to AU$0.98. In the lead-up to this report, the analysts had been modelling revenues of AU$890.8m and earnings per share (EPS) of AU$0.99 in 2026. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small lift in to revenue forecasts.

See our latest analysis for Lovisa Holdings

The analysts increased their price target 25% to AU$36.03, perhaps signalling that higher revenues are a strong leading indicator for Lovisa Holdings's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Lovisa Holdings, with the most bullish analyst valuing it at AU$44.50 and the most bearish at AU$26.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Lovisa Holdings' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 19% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.7% annually. Even after the forecast slowdown in growth, it seems obvious that Lovisa Holdings is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Lovisa Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Lovisa Holdings analysts - going out to 2028, and you can see them free on our platform here.

It might also be worth considering whether Lovisa Holdings' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.