A2 Milk shares: Buy, hold, or fold?

The A2 Milk Company Ltd (ASX: A2M) share price is having a good month, gaining 13.5% over the past 30 days. But looking further back, the company has had a shocking few years.

A2 Milk shares have fallen 1% over five years despite hitting a record high of $20.05 in 2020. That’s compared to an 18% gain posted by the S&P/ASX 200 Index (ASX: XJO) over the last half-decade.

The A2 Milk share price last traded at $5.46.

But one top broker has tipped it to lift to as high as $6.60 – representing a potential 21% upside.

So, what’s got some experts bullish, and others not so much, about the milk and baby formula favourite? Keep reading to find out.

Is now the time to snap up A2 Milk shares?

Experts’ opinions are mixed regarding the future of the A2 Milk share price.

Some, like Goldman Sachs, are bearish. The broker has slapped the stock with a sell rating. Though, its $5.65 price target alludes to a potential 3.5% upside.

Others, including Wilsons investment advisor Peter Moran, aren’t so sceptical, tipping the company as a hold.

Moran labelled the company’s latest earnings “strong” but warned of “challenging” market conditions brought about by rising competition and China’s falling birth rate, The Bull reports.

A2 Milk’s revenue lifted close to 20% year-over-year in financial year 2022, reaching NZ$1.4 billion. Its after-tax profits also rose 42% to around NZ$115 million. The company also announced a NZ$150 million on-market share buyback.

Capital Wealth portfolio manager Tim Haselum has also branded A2 Milk a hold, according to the publication. He says the company’s share price already has notable upside factored in.

However, plenty of experts are bullish on the A2 Milk share price.

Perpetual Equity Investment Company believes A2 Milk has a strong brand and likes its balance sheet, which comprises more than NZ$800 million in cash and no debt, as The Motley Fool Australia’s Bruce Jackson reports.

And finally, top broker Bell Potter has slapped A2 Milk shares with a buy rating and a $6.60 price target, representing a potential 21% upside, as my Fool colleague James reports.

The company’s growing exports to China were behind much of the broker’s positive outlook.

The post A2 Milk shares: Buy, hold, or fold? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Could the A2 Milk share price be ready to leave the ‘doghouse’?
• Leading fund manager sees “material upside” to the a2 Milk share price
• Broker says the A2 Milk share price can charge even higher
• Why A2 Milk, BHP, Lovisa, and Nickel Industries shares are charging higher
• Why is the A2 Milk share price storming 6% higher on Monday?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs. 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 Scott Phillips.

from The Motley Fool Australia https://ift.tt/o0qFZf1