UBS analysts are of the opinion that investor caution suggest future recovery is yet to be priced in to A2 Milk Company’s share price, expecting the company is approaching a three-year period of meaningful recovery.
The broker notes A2 Milk Company should benefit from improved online English-label infant milk formula sales and share gains in the China-label infant formula sector. Expect FY24 earnings per share to be up 122% on FY22 results.
In the nearer-term, the broker notes the start of FY22 has been slow, driven by market headwinds, but earnings forecasts remain in reach.
The Buy rating and target price of NZ$10.20 are retained.
Sector: Food, Beverage & Tobacco.
Current Price is $5.45. Target price not assessed.
