Credit Suisse observes the a2 Milk Co is holding market share gains as the broader market declines.
The broker notes freshness dates improved over June, suggesting spritely sales over the June holidays, the company ranking as the 4th most purchased brand in the holidays according to TMall, up from 7th in in 2021.
But the broker doubts the holiday fever will be repeated in the broader market, particularly given China’s lockdowns, and notes Nielsen data shows the infant formula category fell during January to April, and competitors have issued profit warnings.
Neutral rating and $5.15 target price retained.
Sector: Food, Beverage & Tobacco.
Target price is $5.15.Current Price is $4.56. Difference: $0.59 – (brackets indicate current price is over target). If A2M meets the Credit Suisse target it will return approximately 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).
