Buy, hold, sell: A2 Milk, ARB, and Wesfarmers shares

If you are looking for some investment ideas, then read on.

That’s because analysts have just given their verdict on three popular ASX shares.

Here’s what they are saying, courtesy of The Bull, this week:

A2 Milk Company Ltd (ASX: A2M)

The team at Baker Young notes that this infant formula company’s shares have come under pressure due to news that Chinese birth rates have fallen heavily.

However, it doesn’t think its shares have fallen quite enough to warrant anything more than a hold rating right now. It said:

A2M shares tumbled about 12 per cent on January 19 following news that birth rates in China – its key infant formula market – fell 17 per cent in 2025 to multi-decade lows. While this suggests continued headwinds for demand, we note the company is still likely to see mid-single digit sales and earnings growth in fiscal year 2026.

A2M enjoys significant pricing power in China, boasts a strong balance sheet and has the potential to further diversify its products and end markets over the medium term.

ARB Corporation Ltd (ASX: ARB)

Another ASX 200 share that has fallen heavily is 4×4 parts manufacturer ARB. This has been driven by the release of a disappointing trading update.

Despite this decline, Baker Young notes that its shares are still trading above its valuation. As a result, it has put a sell rating on its shares. It said:

The four wheel drive accessories maker warned on January 20, 2026 that sales in key Australian and OEM (original equipment manufacturer) markets continued to decline in the first half of 2026. While exports to the United States were better than expected, it represents a smaller portion and lower margin segment of ARB’s business and is unlikely to offset major headwinds largely beyond the company’s control.

ARB shares were recently trading more than 10 per cent above our valuation, so we suggest investors consider selling around current levels.

Wesfarmers Ltd (ASX: WES)

Over at Morgans, its analysts recognise the quality of this conglomerate. However, due to a strong re-rating of its shares last year, the broker feels they are fully valued now.

As a result, it has suggested that investors sell Wesfarmers shares this week. It said:

Wesfarmers remains a high quality industrial conglomerate, but after a strong re-rating through 2025 and solid fiscal year 2025 results, the stock, in our view, now screens as close to fully valued with limited upside. Shares were recently trading near the upper end of its recent range, supported by resilient results at Bunnings and Kmart.

However, broader group earnings are increasingly sensitive to macroeconomic conditions across retail, industrials and commodities. While the longer term outlook remains strong, the recent valuation already captures much of the good news. With the stock priced for perfection amid slowing momentum, we believe investors may benefit from reducing exposure at these levels.

The post Buy, hold, sell: A2 Milk, ARB, and Wesfarmers shares appeared first on The Motley Fool Australia.

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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 positions in and has recommended ARB Corporation and Wesfarmers. The Motley Fool Australia has recommended ARB Corporation and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.