MENU

Can the Bellamy’s Australia Ltd share price climb higher?

The Bellamy’s Australia Ltd (ASX: BAL) share price was one of the best performers on the market on Tuesday following the release of its trading update the night before.

The infant formula company’s shares finished the day 25% higher at $13.68. This was the highest close price for Bellamy’s shares in well over a year.

Can its shares go higher from here?

Considering the success of its incredible and unlikely turnaround, I would not at all be surprised to see its shares rise further from here.

I’m not alone in this view either. According to a broker note out of Morgans yesterday, the broker has upgraded Bellamy’s to an add rating from hold.

Its analysts have also increased the price target on its shares all the way up from $9.95 to $14.70. This price target implies the potential for further upside of approximately 7.5% for its shares based on its last close price.

According to the note, the broker expects Bellamy’s to hit the high-end of its FY 2018 guidance of revenue growth between 30% and 35%.

Furthermore, the broker is confident that the company will deliver strong results in FY 2019 and FY 2020, just as long as its CFDA accreditation application is approved.

I believe the probability of its application failing is highly unlikely given that other products being manufactured at its Camperdown facility have recently being granted accreditation.

Should you invest?

Due to the tailwinds they are experiencing in the Chinese, I think that both Bellamy’s and rival A2 Milk Company Ltd (ASX: A2M) could be great long-term buy and hold investments.

Their shares may have a significant amount of growth built into them already, but I have a feeling they will outperform expectations over the next few years due to the growing popularity of Australian and New Zealand products in China.

As well as a2 Milk and Bellamy's I think these top shares have the potential to climb notably higher over the next 12 months.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.