Citi hikes a2 Milk's target price despite forex headwinds

A2 Milk

20/11/2022 22:12

** Analysts at Citi hike price target for ASX-listed shares
of a2 Milk Co Ltd  A2M.AX  to A$4.51 from A$4.38
    ** New Zealand-based dairy firm forecast a positive FY23 in
its annual meeting announcement last week; says a weaker local
currency inflated revenue, with rising interest rates improving
interest income on term deposits
    ** Citi analysts view the forecast as "somewhat surprising"
given NZD has weakened since FY22 results in late-August,
implying lower sales transition
    ** Brokerage sees challenging industry conditions to
continue and regulatory uncertainty to remain elevated
    ** Cuts FY23 NPAT estimate by 2% citing weaker FX
assumption; leaves FY24-25 forecasts unchanged
    ** Four/12 analysts rate A2M "buy" or higher, four "hold"
and three "sell" or lower; their median PT is A$5.68 – Refinitiv
data
    ** A2M up 9% this year, as of last close, vs a 3.9% decline
in the ASX 200 benchmark index  .AXJO  
 (Reporting by Sameer Manekar in Bengaluru; Editing by Sandra
Maler)
 ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))