Insights

The A2 Milk (ASX:A2M) share price is up 5% in 5 days. Can it go higher?

The A2 Milk Company (ASX: A2M) share price is now up by around 5% in 5 trading days. Is this a recovery, or are A2M shares stuck in the mud?
The post The A2 Milk (ASX:A2M) share price is up 5% in 5 days. Can it go higher? appeared first on The Motley Fool Australia. –

growth in dairy ASX share price represented by smiling cow

A2 Milk Company Ltd (ASX: A2M) shares are not having a fantastic day today. At the time of writing, the A2 Milk share price is down 0.55% to $7.18. That contrasts with the broader S&P/ASX 200 Index (ASX: XJO) which, presently, is essentially flat with a decline of 0.02%.

But zooming out, and the picture looks a little better for A2 Milk. One could arguably even say it looks as though the embattled dairy company may have found a share price bottom after a disastrous few months.

A2 shares bottomed out last week when they hit a new multi-year low of $6.83 a share last Tuesday. That’s the lowest share price that A2 has experienced since October 2017. It also represents a fall of more than 64% from the company’s 52-week (and all-time) high of $20.05 that we saw back in July last year.

That bottom was the culmination (at least until today) of a series of bad news items for the A2 Milk share price. These mostly revolve around the collapse of the Chinese sales channels known as daigou.

Daigou sales are where customers buy products in bulk in order to ship them to China for resale. They were a very popular and lucrative channel for A2 – at least until the coronavirus pandemic came along. Together with the effects of the deterioration of Sino-Australian relations over the past year or so, demand from this side of the Chinese market has all but dried up.

This is a big deal for A2, which reported a 16% slump in revenues in its last earnings report, largely as a result of the daigou issue.

But since last Tuesday when the A2 share price hit this low, the company has rebounded rather enthusiastically. On the current share price, the gains since Tuesday are clocking at 5.1% which is a pretty sturdy recovery. So have we indeed found the bottom for A2?

Are A2 shares a buy today?

Despite the low share prices we are still seeing for A2 Milk, it still doesn’t have too many fans. As my Fool colleague James reported last month, broker Morgans has a ‘hold’ rating on A2, with a price target of $8.24. Citi is less optimistic, with a ‘sell’ rating and a price target of $7.15. So clearly, some brokers don’t have rose-tinted glasses on this one.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Sebastian Bowen owns shares of A2 Milk. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post The A2 Milk (ASX:A2M) share price is up 5% in 5 days. Can it go higher? appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!