Morgans expects downward revisions to consensus estimates after the a2 Milk Company materially lowered its five-year margin target, despite the revenue target slightly exceeding expectations. The broker sees corporate activity as the key upside risk.

The analyst maintains a Hold rating on a full valuation and ongoing regulatory and earnings uncertainties. The target price rises to $6.35 from $6.25. The performance of the high-margin English label infant formula is thought to be key to the company's FY22 earnings. 

Sector: Food, Beverage & Tobacco.

Target price is $6.35.Current Price is $6.03. Difference: $0.32 - (brackets indicate current price is over target). If A2M meets the Morgans target it will return approximately 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2021 Acquisdata Pty Ltd., source FN Arena