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ATM: Regulatory Approvals And Index Inclusion Will Shape Balanced Medium Term Outlook

Supply Constraints And Costs Will Pressure Earnings But Profit Margins Are Set To Improve

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ATM
AnalystConsensusTarget
Not Invested
Published 13 Mar 2025

Update shared on 11 Dec 2025

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Analysts have modestly increased their price target on a2 Milk to reflect slightly stronger expected revenue growth and marginally improved profit margins, while maintaining a broadly similar valuation multiple.

What's in the News

  • Received approvals from New Zealand's Ministry for Primary Industries and China Customs to progress regulatory transfer of two China label infant milk formula registrations tied to the Pokeno facility, with final SAMR approval to be sought in December 2025 and potential product launch targeted for late first half of 2027 (Regulatory Authority compliance filing).
  • Confirmed earnings guidance for fiscal 2026, targeting low double digit percentage revenue growth versus fiscal 2025 (Corporate guidance announcement).
  • Expanded long term strategic cooperation with China State Farm Agribusiness Holding Shanghai to cover English label infant milk formula sales via cross border eCommerce, initially featuring a2 Genesis from early calendar 2026 with scope to add further English label products over time (Client announcement).
  • Strengthened position in global equity benchmarks after being added to the S&P Global BMI Index, potentially broadening the shareholder base and index linked demand for the stock (Index constituent update).

Valuation Changes

  • Revenue Growth: The forecast has risen slightly from about 6.7 percent to about 6.9 percent, reflecting a modestly stronger top line outlook.
  • Net Profit Margin: The expectation has edged up marginally from about 12.73 percent to about 12.74 percent, indicating only a very small improvement in projected profitability.
  • Future P/E: The assumption has fallen slightly from about 30.1x to about 29.9x, suggesting a marginally lower valuation multiple applied to future earnings.
  • Discount Rate: This remains unchanged at about 7.1 percent, indicating no adjustment to the assumed cost of capital.
  • Fair Value: The estimate is effectively unchanged at about NZ$9.93 per share, with minor model adjustments largely netting out.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.