On Wednesday the A2 Milk Company Ltd (ASX: A2M) share price finished the day almost 30% higher following the release of a staggering first-half result.
Incredibly, this strong run has continued today with the fast-growing dairy company's shares rising a further 17% in morning trade to $13.21.
What happened?
As well as investors fighting to get hold of shares following yesterday's result, a2 Milk's shares were given a lift this morning from a broker note out of Citi.
According to the note, analysts at Citi were incredibly impressed with a2 Milk's performance during the half and were surprised by the level of operational momentum.
While the broker does believe that the favourable market conditions will attract competition, it remains confident that a2 Milk will deliver an outstanding full-year result. This led its analysts to revise higher their sales, margins, and earnings estimates.
Citi has a buy rating and an increased target of $14.00 on the market darling's shares. Which implies potential upside of 6% from the current share price.
Should you invest?
Whilst it might be worth waiting for things to settle down a touch before buying shares, especially with profit-taking likely after such a strong move higher, I do think a2 Milk continues to be a great buy and hold investment option.
And although I agree with Citi that competition is likely to increase in the future given how attractive the market is, I think the strength of the a2 Milk brand and its premium image should help it fend off its rivals and allow it to continue growing market share.
In light of this, I would still choose it ahead of rivals Bellamy's Australia Ltd (ASX: BAL), Bubs Australia Ltd (ASX: BUB), and Wattle Health Australia Ltd (ASX: WHA), even after its meteoric rise.
