A2M – Macquarie rates the stock as Outperform

a2 Milk provided solid revenue guidance and margin upgrades at its AGM, thanks to price increases, product launches and benefits from the Synlait Milk ((SM1)) contract renegotiation. Improved disclosure addressed a number of market concerns, Macquarie notes.

The broker has made only minor forecast adjustments but has lifted its target to $16.20 from $15.70. Outperform retained.

Sector: Food, Beverage & Tobacco.

Target price is $16.20.Current Price is $13.37. Difference: $2.83 – (brackets indicate current price is over target). If A2M meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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