Ann: Deferral of FDA consideration of enforcement discretion, page-129

The US FDA has put all applications for importing infant formula into the USA on hold and Macquarie, upon first hearing the news, concludes the decision makes a lot of sense.

The underlying reasoning is that any approvals from here on would unlikely hit shelves before shortages are relieved further, hence the pause on approvals appears logical, says the broker.

For a2 Milk shares, that have rallied from around $4.53 to $5.11 on speculation for FDA approval, however, today's news can be a reason for short-term selling, the broker suggests.

Generally speaking, Macquarie's view is a2 Milk's valuation appears "elevated" given a challenging market backdrop. Underperform. Target $4.