The A2 Milk Company Ltd (ASX: A2M) share price is under pressure again on Friday.
At the time of writing, the struggling infant formula company's shares are down 2% to $5.91.
This means A2 Milk's shares are now down almost 50% since the start of the year.
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Is the weakness in the A2 Milk share price a buying opportunity?
Brokers have been running the rule over the company's full year results and have given their opinion on whether there's an investment opportunity here.
One broker that wasn't impressed with its result was Macquarie Group Ltd (ASX: MQG). This morning the broker retained its underperform rating and cut its price target down to $5.40.
Based on the current A2 Milk share price, this implies potential downside of almost 9%.
Macquarie is expecting another tough year in FY 2022 and has downgraded its near term earnings estimates materially to reflect a softer revenue and margin recovery.
A bullish broker
The bulls at Bell Potter disagree and believe the A2 Milk share price is still in the buy zone.
According to the note, the broker has retained its buy rating but cut its price target to $7.70. This implies potential upside of 30% over the next 12 months for its shares.
The broker commented: "Our Buy rating remains unchanged. Sell-in rates materially lagged sell-out rates in 2H21, implying steps to reduce channel inventories have been effective. As revenues more closely align to point of sale trends we would expect top line growth to return, which could well be complemented by internalising supply chain costs in FY23-25e."
Surprisingly, Bell Potter isn't alone. The team at Citi has actually upgraded A2 Milk's shares to a buy rating and increased their price target on them to $7.20.
Its analysts were pleased with the company's inventory position and brand health in the key China market. Citi believes the latter may be an indication that the A2 Milk brand is much stronger and resilient than previously thought.
Time will tell which broker has made the correct call.
