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.
