NZ's a2 Milk supply disruptions temporary, customer demand strong, analysts say

A2 Milk

19/08/2024 23:00

** Citi and Morningstar analysts say supply-chain
disruptions for diary giant a2 Milk  ATM.NZ   A2M.AX  are
temporary
    ** Both NZ and Australia-listed shares of a2 slumped more
than 18% on Monday after co forecast annual revenue growth below
expectations, citing challenging market conditions in China
    ** Citi analysts say it is prudent to look through supply
issues given most of the brand and operating indicators suggest
a2's underlying customer demand momentum remain strong
    ** Citi says supply issues are not uncommon in the infant
formula industry and are unlikely to persist over medium term
    ** Brokerage estimates FY25 sales growth of 5.6%, keep 'buy'
rating
    ** Morningstar also says a2's supply constraints are
transient
    ** Brokerage says the share price fall presents an
attractive entry point for investors
    ** As of last close, co's NZ shares up 36.3% and Aussie
shares up 33.8% YTD

    
    

 (Reporting by Himanshi Akhand in Bengaluru)
 ((Himanshi.Akhand@thomsonreuters.com;))