The a2 Milk Co's result was considered weak by Morgans though slightly ahead of guidance. Despite management issuing another material downgrade, the broker believes the company is well placed over the medium to longer-term once channels normalise.

The analyst reduces FY21-23 profit (NPAT) forecasts by -13.7%, -14.1% and -13.9%, respectively, though forecasting forecast solid earnings growth from FY22. This is driven by a recovery in the daigou as covid restrictions ease and growth in China and North America. 

Add rating and target is decreased to $10.40 from $12.20.

Sector: Food, Beverage & Tobacco.

Target price is $10.40.Current Price is $8.77. Difference: $1.63 - (brackets indicate current price is over target). If A2M meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2021 Acquisdata Pty Ltd., source FN Arena