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A2 Milk Up 10% On A Positive Outlook for FY20

Jordan Baird

Jordan Baird is the head ASR Wealth Advisers client services desk and has been with the organisation since 2017. He first started investing in his early years. While he believes that investors should leave no stone unturned he has a particular interest in trading based on broad macroeconomic trends along with specific analysis of innovative up-and-coming companies.

A2 Milk Ltd (ASX: A2M) was founded in New Zealand that has now expanded in Australia, China and the United States (US). A2 Milk specialise in milk products, specifically, the brand called A2 Milk. A2 Milk is different from conventional cows’ milk because it comes from cows selected to naturally produce only the A2 protein type and no A1 protein. A2 Milk has a market capitalisation of A$8.8 billion.

a2m-share-price

What has happened to the share price?

A2 Milk is currently trading at A$13.32 and is up around 10% today.

What is the cause of the sharp increase in the share price?

A2 Milk had its AGM today. The main take away from the AGM is that A2 Milk upgraded its full-year outlook on the back of strong growth in China and the US markets.

A2 Milk management noted the following:

Overall, for FY20 we anticipate continued strong revenue growth across our key regions supported by brand and marketing investment in China and the US and the development of both capability and infrastructure to support in-market execution.

A2 Milk management noted that for 1H20 it is anticipated that revenue should be in the range of A$780 – A$800 million. Additionally, EBITDA margin in 1H20 is expected to be higher than FY20 and in the range of 31-32%.

 


 

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law, we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

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