Where next for the a2 Milk (ASX:A2M) share price?

The A2 Milk Company Ltd (ASX:A2M) share price has fallen heavily in 2021. Where are its shares going from here?
The post Where next for the a2 Milk (ASX:A2M) share price? appeared first on The Motley Fool Australia. –

The A2 Milk Company Ltd (ASX: A2M) share price is under pressure again on Monday.

At one stage today, the fresh milk and infant formula company’s shares were down 3.5% to $5.36.

When the a2 Milk share price hit that level, it was down a very disappointing 73% from its 52-week high.

Where next for the a2 Milk share price?

Given the sharp decline in the a2 Milk share price from its high, investors will no doubt be wondering where it is heading next.

However, unfortunately, opinion remains incredibly divided even after this sizeable decline.

The bears over at Credit Suisse believes the company’s shares could still fall further and have slapped a sell rating and $5.00 price target on them.

Citi and Macquarie also have sell ratings on its shares with price targets of $5.85 and $5.60, respectively.

Sitting on the fence is Morgan Stanley. Its analysts have an equal-weight rating and $7.10 price target. Though, with this price target implying potential upside of 32%, an upgrade to a buy rating may not be far away if its performance doesn’t deteriorate further.

The bulls

Despite its abject performance, which has led to four earnings guidance downgrades in FY 2021, there are a few brokers that have bullish views on the a2 Milk share price.

Morgans currently has an add rating and $6.65 price target and, last week, UBS put a buy rating and NZ$13.50 (A$12.50) price target on its shares. The latter rather optimistically implies that the a2 Milk share price could double over the next 12 months.

And finally, analysts at Bell Potter have a buy rating and $8.50 price target on the company’s shares.

What now?

Which broker’s recommendation ultimately proves accurate will entirely depend on the success of a2 Milk’s inventory rebalance and the review of its growth strategy and executional plans to respond to changes in the lucrative China market.

But given the company’s failure to turn around its performance numerous times in FY 2021, the near term remains very uncertain. This helps to explain why brokers have such mixed views on the company right now.

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.

*Returns as of February 15th 2021

More reading

Synlait (ASX:SM1) share price on watch after guidance downgrade
Top brokers name 3 ASX shares to buy next week

Why is the A2 Milk (ASX:A2M) share price up 7% today?
Why a2 Milk, EML Payments, Webjet, & Xero shares are pushing higher

ASX 200 down 0.25%: Kogan sinks, EML & A2 Milk jump

The post Where next for the a2 Milk (ASX:A2M) share price? 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!