A2 Milk (ASX:A2M) share price rises despite bearish broker note

This infant formula company's shares are rising…

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The A2 Milk Company Ltd (ASX: A2M) share price is pushing higher on Monday morning.

In late morning trade, the embattled infant formula company's shares are up almost 1% to $5.56.

Despite this rise, A2 Milk's shares are still down a disappointing 52% since the start of the year.

Can the A2 Milk share price keep rebounding?

Unfortunately for shareholders, one leading broker isn't confident the A2 Milk share price will continue to rebound.

According to a note out of Credit Suisse from last week, its analysts have reaffirmed their underperform rating and $5.50 price target on the company's shares.

This is broadly in line with where its shares are trading today.

Why is the broker bearish on the company?

Credit Suisse notes that infant formula pricing was stable in August and that channel inventory appears to be heading in the right direction again.

However, this isn't enough for the broker to become more positive on the A2 Milk share price.

This is because Credit Suisse continues to be concerned by the impact that China's slowing birth rate could have on its sales.

Furthermore, it notes that management has acknowledged that it is losing market share in Stage 1 English Label infant formula. It fears that as these children age, the company's Stage 2 and Stage 3 product sales could suffer.

Is anyone else more positive?

The good news for its long-suffering shareholders is that another broker disagrees and sees value in the A2 Milk share price.

A note out of Citi from late last month saw the broker upgrade the company's shares to a buy rating with a $7.20 price target.

It has been pleased with its inventory management and believes the A2 Milk brand in China is stronger and more resilient than previously thought.

Which broker has made the right call, time will tell.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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