Lovisa Holdings (ASX:LOV) expectations for the first half of fiscal 2025 and beyond are too aggressive due to subdued sales growth, UBS said, according to a Thursday report from The Australian.
Though Lovisa has potential for store growth, the pace of new store openings has been modest in recent years, UBS analyst Shaun Cousins said.
Cousins also noted that while the company's comparables were undemanding, Lovisa's like-for-like sales growth has been subdued, with growing risks from competition.
"The risk-reward is no longer compelling," Cousins said.
UBS downgraded Lovisa Holdings to sell from neutral and cut its price target to AU$27.
Shares of the jewelry retailer fell past 11% in recent Thursday trade.
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