Shareholders of Blackmores Limited (ASX: BKL) have been given a confidence boost today after Credit Suisse initiated coverage on the vitamin maker.

According to Dow Jones Newswires, the broker initiated its coverage on the stock at ‘Outperform’, slapping a $175 price target on the shares in the process. The shares have lifted 4.3% as a result to $141.76, which is still more than 23% below the target price, although it is well below the lofty heights the shares reached in December last year.

Indeed, Blackmores was one of the most sought after shares in 2015, even climbing as high as $220 just before the New Year. However, shares have collapsed in 2016, shedding as much as 41% to a low of $130 last week.

This has largely been a result of the company’s valuation, together with concerns related to the regulatory environment in China which have also impacted shares of Bellamy’s Australia Ltd (ASX: BAL) and a2 Milk Company Ltd (Australia) (ASX: A2M).

What’s more, Blackmores announced a new deal with Bega Cheese Ltd (ASX: BGA) late last year to expand into the lucrative infant formula market. While that created a great deal of excitement at the time, early reports suggest that Blackmores may be struggling to build a share in the market – although it is still early days.

Still, Credit Suisse appears confident that Blackmores’ China sales can continue to grow strongly thanks to its position as one of Australia’s leading vitamin makers. As quoted by The Australian, the broker said: “Blackmores’ China sales could double by FY20 fueling 16% EPS CAGR FY16–FY20… China sales could surpass A$580mn accounting for 50% of the group.”

Although Blackmores shares mightn’t be cheap, they could certainly be worth a closer look at these prices. Indeed, China’s regulatory environment is a concern for investors which has weighed on its share price, but the company believes it is well equipped to cope with any changes that are made.

Sales and earnings growth did slow down during the third quarter compared to the first half of the year, which is something investors should be aware of. In saying that, revenue still grew an incredible 63.1% year-over-year (compared to 65.5% in the first half), while net profit after tax (NPAT) was up 145.5% (compared to 159.5% in the first half).

According to Yahoo! Finance, the average estimate of six analysts is for $5.94 in earnings per share for FY16. At that rate, the company’s shares would trade on a forecast multiple of 23.9x which isn’t cheap, but it’s not excessive either considering the company’s growth potential.

I don’t own shares in the business yet, but it’s certainly on my watch list.

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Motley Fool contributor Ryan Newman owns shares of Bellamy's Australia. The Motley Fool Australia owns shares of A2 Milk and Bellamy's Australia. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.