Top broker slaps $8.85 price target on a2 Milk Company Ltd (Australia) shares

The a2 Milk Company Ltd (Australia) (ASX:A2M) share price could be on its way to $8.85 according to one leading broker…

| More on:
ASX buy

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The a2 Milk Company Ltd (Australia) (ASX: A2M) share price has built on yesterday’s solid gain and is up a further 5% to $7.84 in morning trade.

This means the dairy company’s shares are now up a whopping 280% since the turn of the year.

Can they go higher?

As far as one leading broker is concerned, a2 Milk’s shares still have quite a bit left in the tank.

A broker note out of Citi this morning reveals that its analysts have retained their buy rating on its shares following its annual general meeting.

Furthermore, the broker has upgraded its price target from $6.00 all the way up to $8.85. This price target implies potential upside of almost 13% for its shares over the next 12 months.

Citi appears to have liked what it saw yesterday and expects further market share gains by the company’s a2 Platinum formula in China. In light of this it has upgraded its earnings estimates through to FY 2020.

Should you buy its shares?

I have been very impressed with the way that a2 Milk has consistently outperformed the market’s lofty expectations and expect this to remain the case for some time to come.

Despite its incredible growth in China, the company still only has a relatively small slice of its massive infant formula market. I expect it has a chance of capturing more when regulations change in January.

In light of this I would have to agree with Citi that the company’s shares are a buy today and would suggest investors choose them ahead of rivals Bellamy’s Australia Ltd (ASX: BAL) and Bubs Australia Ltd (ASX: BUB).

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. 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.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

asx share price competitions represented by businessmen arm wrestling
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

person reading news on mobile phone
⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »