A2M – UBS rates the stock as Neutral

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It was another strong result from a2Milk, ahead of the broker, driven by A&NZ and China. There is no sign of a slowing of demand in China, the broker notes, and the a2 brand continues to enjoy a strong customer response. FY20 should see the benefits of marketing spend in the second half.

The broker would like to have a more positive view overall but retains Neutral, concerned about a single a2 brand and a rich valuation. New product launches would help, particularly in the US which the broker sees as an underappreciated opportunity. Target rises to NZ$14.00 from NZ$11.80.

Sector: Food, Beverage & Tobacco.

Current Price is $13.64. Target price not assessed.

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