A2 Milk shares reverse course, Citi flags FY27 earnings risk

The a2 Milk

07/07/2026 04:38

Updates
** Shares of a2 Milk ATM.NZ veer into negative territory after hitting a three-month high earlier in the session, last down 0.8% 
** Stock rose as much as 4.5% to NZ$9.77 earlier in the session, to their highest level since April 14
** Dairy producer says supply issues that affected its core China-label IMF product have now been substantially resolved
** Adds co now expects FY26 NPAT to be slightly up from last year's NZ$202.9 million ($115.65 million) vs earlier forecast of in line-to-lower profit
** Citi says a2's confirmation that FY26 earnings will be inline with or slightly above previously downgraded guidance was largely expected
** Lower China label IMF product availability necessitated a large proportion of existing users to switch to alternative brands, co adds; Citi says it is unlikely that all customers will return to a2 now that stock levels improved
** User switches see Citi warning of downside risk to FY27 consensus earning
** Co's NZ shares down nearly 14% YTD 
     
($1 = 1.7544 New Zealand dollars)

 (Reporting by Shruti Agarwal and Nikita Maria Jino in Bengaluru)
 ((Nikita.Jino@thomsonreuters.com;))