Media Updates, page-3304

From the AFR, really trying to push the share price down before AGM!



25 mins ago

–2.03pm

A2 Milk: Macquarie drops price target, says demand unclear

William McInnes

Macquarie has dropped its price target on A2 Milk, saying demand was a key uncertainty for the company in the near term.

The broker maintained its 'outperform' recommendation but cut its price target from $16.70 to $15.70.

"Demand is the key uncertainty with o nline resale pricing and platform discounting negatively impacting scope for reseller margin and hence potentially demand push," Macquarie analysts noted.

"Differences between sell-in and sell-through could impact results if A2 Milk needs to tighten the market back up."

Macquarie sees upside for A2 Milk. Grainne Quinlan

The broker was more positive on the company's longer term future, noting the launch of its UHT milk, coffee creamer and the roll out of Smart Nutrition drink.

"The pricing of the UHT and Smart Nutrition to us should offer gross margins in excess of infant margins, and hence could be accretive to group gross margins if these product lines can scale," the analysts said.

"We think such products help extend lifetime value of loyal customers, but this will take some time for A2 Milk to prove."