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Is A2 Milk (ASX: A2M) and the share bargain by which this was defeated?

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The Australian stock market may have hit a high in 2021, but not all stocks can keep up.

The two ASX shares listed below have been defeated this year. Is this a buying opportunity for investors?

A2 Milk Company Limited (ASX: A2M)

A2 Milk’s share price fell 47% this year to show its worst performance. Of course, this is caused by a significant deterioration in the performance of infant formula companies.

One major broker that sticks to the company is Bellpotter. Recently, it maintained its stock purchase rating and price target of $ 7.70. Based on the current A2 Milk stock price, this means a potential rise of 25% for investors.

Bell Potter is pleased with A2 Milk’s recent investor updates and management’s medium-term goals.

It commented as follows: “A2M is a teenage target margin with a medium-term target of approximately $ 2 billion in revenue. Given high EL, a mid-20s margin is achievable in the long run. [English label] Recovery and expansion of market share. Revenue targets, if achieved, will be significantly higher than FY24e’s target of approximately $ 1.6 billion. “

There is also great value in management’s plan to double its market share in China by expanding sales of Mother and Baby Stores (MBS) from 23.8k stores to 30k-35k stores.

“In our view, the runway to expand the MBS channel is achievable based on the average sales rate of A2M and competitors in relation to competitors, and only to achieve distribution expansion. We will add NZ $ 200-400 million in revenue, so we do not consider China’s label target to be particularly offensive. “

Overall, brokers seem to see the weakness of A2 Milk’s share price this year as an investor buying opportunity.

Bravura Solutions Ltd (ASX: BVS)

Bravura’s share price has fallen 18% since the beginning of the year. This is unfortunate, but the Goldman Sachs team believes it could be a buying opportunity for investors.

This week, brokers repeated buying valuations on wealth management technology stocks and a $ 3.70 price target. This means that it could rise 39% from the current Bravura share price.

Goldman states that the company is in a great position to achieve growth beyond 2022. This is due to a healthy pipeline in key markets, transitions to consumption-based contracts, acquisitions, and the evolution of Australia’s aging market.

Regarding the latter, the broker said: “BVS expects this market evolution to offer significant opportunities for Sonata Alta and Digital Advice to meet client needs such as a seamless digital experience, continuous regulatory changes, and pressure to improve operational efficiency. In our view, this dynamics could see more contracts with large aging funds, as well as Aware Super contracts. “

Overall, the current trend is changing, and Goldman seems to believe that investors should jump in before it’s too late.

Is A2 Milk (ASX: A2M) and the share bargain by which this was defeated?

Source link Is A2 Milk (ASX: A2M) and the share bargain by which this was defeated?

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