The a2 Milk Company Ltd (Australia) (ASX: A2M) share price is having a solid finish to the week.
In early afternoon trade the dairy company's shares are almost 3% higher to $7.22.
Why are they higher?
With no news out of the company, today's share price gain is likely to be attributable to a research note out of the equities desk of Macquarie.
According to the note, its analysts have retained their outperform rating and lifted the price target on its shares to NZ$8.40 (A$7.60).
The broker has made this move after reviewing its recent investor presentation. Macquarie appears to have been pleased with the progress it has made in China since the start of the financial year.
In the update a2 Milk advised that its estimated share of the Chinese infant formula market has increased to 4.1% from 3.5% previously.
Macquarie doesn't expect things to stop there and believes there is plenty of opportunity for the company to capture even more of the market. This could ultimately lead to wider margins and increased profitability.
Should you invest?
Considering the limited upside that this price target implies and the fact that its annual general meeting is due to take place on Wednesday of next week, I would suggest investors resist the urge to invest today.
The company is widely expected to provide the market with a trading update and full-year guidance at its AGM. If this fails to live up to expectations then I suspect its shares could come under significant pressure.
In light of this, I would wait patiently for the update and consider some of the other top growth shares on the market in the meantime.
