Baby has a stuffy nose after drinking her formula milk, could it be a milk allergy?

Unlikely: True milk allergy is rare & most evident by bloody, frothy stools among other issues. The physical property of tiny infant nasal passages make it more prone to congestion by airborne irritants/dust/fragrance/etc. that baby tries to flush out with mucus. This narrows an already tight space much more in infants than an older kid/adult. Nasal wash out with saline helps as does cleaning the air.