On Monday the shares of A2 Milk Company Ltd (ASX: A2M) and Bellamy's Australia Ltd (ASX: BAL) continued their poor run and started the week in the red.
These latest declines mean that a2 Milk Company's shares have fallen almost 31% from their 52-week high and Bellamy's shares have dropped a massive 52% from their high.
Is this a buying opportunity?
While I'm not overly convinced that the declines are necessarily over just yet, I do think that this is a buying opportunity for patient investors.
Especially with both their shares trading on some of the most reasonable earnings multiples they have traded at in some time.
I'm not alone in thinking they are in the buy zone either. A note out of Goldman Sachs this morning reveals that it remains bullish on both companies' prospects.
According to the note, centred around the Chinese consumer staples market, Goldman expect the infant milk formula market to grow by a compound annual growth rate of 9% through to FY 2020.
Although the broker doesn't necessarily believe the market will grow much by way of volume due to the current high level of penetration and a shrinking marriageable population, it expects the value of the market to grow through premiumisation, demand from lower tiered cities, and niche category expansion.
In light of this, the broker think both companies are positioned well for growth and has price targets of $12.20 on a2 Milk Company's shares and $21.00 on Bellamy's shares, implying significant upside for both of them.
What about other shares?
One company that Goldman isn't overly bullish on is Blackmores Limited (ASX: BKL).
The broker's research appears to show that Blackmores is lagging is nearest competitor Swisse in China. In light of this, it expects Blackmores to increase its marketing and promotional activities, weighing on its margins in the short term.
Goldman has remained neutral on Blackmores with a $143.50 price target on its shares.