The A2 Milk Company Ltd (A2M.AX): Still waiting for FY27 clouds to clear

研报英文原文证据摘录

The A2 Milk Company Ltd (A2M.AX): Still waiting for FY27 clouds to clear

Action |

07 Jul 2026 05:10:57 ET │ 13 pages

The A2 Milk Company Ltd (A2M.AX)

Still waiting for FY27 clouds to clear

CITI'S TAKE

We remain Neutral-rated on a2 given downside risk to FY27 consensus

earnings. We believe a2 has a lot of work to do regarding winning new

consumers and winning back lost customers (to the extent they can). We see Neutral

the new user recruitment initiatives as beneficial to rebuilding FY27 market Price (07 Jul 26 16:00) A$7.37

share in early stage IMF; however, we are cautious on the extent to that lost

customers cycle through to later stages, prolonging the impact. Target price A$7.00↑

from A$6.70

Earnings changes — FY26/27/28 core NPAT increases by 3%/4%/3%, respectively. Expected share price return -5.0%

We lift FY26 EBITDA margin to 14.4% which is the high end of the 14.0% to 14.5% Expected dividend yield 7.2%guidance range (previously we were at 14.0%). We lift FY27 revenue and earnings

from positive signs around consumer demand during 6.18, which suggests the brand Expected total return 2.2%

remains strong despite disruption and recalls. However, we note we were 15% below Market Cap A$5,346M

VA Consensus EBITDA prior to today’s announcement. New Target Price is $7.00

US$3,749M(+4%) from earnings changes and increased PE rel valuation premium by 10% to 40%

as supply chain and market access disruptions are increasingly normalising. We note

at the 1H26 result this premium was 100%.

Investment view — We are Neutral-rated. We see downside risk to FY27 earnings Price Performance

and believe a2 has a lot of work to do regarding investing in its brand and rebuilding (RIC: A2M.AX, BB: A2M AU)

market share following recent market access disruptions. However, fundamentally,