The a2 Milk Company Limited

CHIA:A2M Stock Report

Market Cap: AU$4.1b

a2 Milk Valuation

Is A2M undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of A2M when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: A2M (A$5.49) is trading below our estimate of fair value (A$20.27)

Significantly Below Fair Value: A2M is trading below fair value by more than 20%.


Key Valuation Metric

Which metric is best to use when looking at relative valuation for A2M?

Key metric: As A2M is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for A2M. This is calculated by dividing A2M's market cap by their current earnings.
What is A2M's PE Ratio?
PE Ratio27.2x
EarningsNZ$167.58m
Market CapNZ$4.55b

Price to Earnings Ratio vs Peers

How does A2M's PE Ratio compare to its peers?

The above table shows the PE ratio for A2M vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average33.1x
BGA Bega Cheese
52.7x22.4%AU$1.6b
ING Inghams Group
11.5x5.2%AU$1.2b
AAC Australian Agricultural
24.1x-27.6%AU$831.8m
CBO Cobram Estate Olives
44x15.1%AU$815.1m
A2M a2 Milk
27.2x12.7%AU$4.6b

Price-To-Earnings vs Peers: A2M is good value based on its Price-To-Earnings Ratio (27.2x) compared to the peer average (33.1x).


Price to Earnings Ratio vs Industry

How does A2M's PE Ratio compare vs other companies in the Oceanian Food Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
A2M 27.2xIndustry Avg. 15.7xNo. of Companies3PE01020304050+
0 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: A2M is expensive based on its Price-To-Earnings Ratio (27.2x) compared to the Global Food industry average (15.7x).


Price to Earnings Ratio vs Fair Ratio

What is A2M's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

A2M PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio27.2x
Fair PE Ratio29.4x

Price-To-Earnings vs Fair Ratio: A2M is good value based on its Price-To-Earnings Ratio (27.2x) compared to the estimated Fair Price-To-Earnings Ratio (29.4x).


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst A2M forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentAU$5.49
AU$6.19
+12.7%
8.0%AU$7.18AU$5.74n/a9
Nov ’25AU$5.71
AU$6.25
+9.5%
8.5%AU$7.25AU$5.71n/a8
Oct ’25AU$6.21
AU$6.30
+1.4%
8.6%AU$7.31AU$5.76n/a8
Sep ’25AU$5.61
AU$6.41
+14.3%
8.7%AU$7.39AU$5.82n/a7
Aug ’25AU$7.12
AU$6.38
-10.4%
11.6%AU$7.42AU$5.39n/a7
Jul ’25AU$6.66
AU$6.12
-8.0%
9.3%AU$7.36AU$5.52n/a7
Jun ’25AU$7.04
AU$6.07
-13.7%
9.5%AU$7.32AU$5.49n/a7
May ’25AU$5.97
AU$6.11
+2.3%
12.4%AU$7.55AU$4.95n/a7
Apr ’25AU$6.21
AU$6.11
-1.6%
12.4%AU$7.55AU$4.95n/a7
Mar ’25AU$5.74
AU$6.11
+6.5%
12.4%AU$7.55AU$4.95n/a7
Feb ’25AU$4.94
AU$5.61
+13.5%
18.8%AU$7.44AU$4.28n/a7
Jan ’25AU$4.26
AU$5.53
+29.8%
19.9%AU$7.38AU$3.92n/a7
Dec ’24AU$3.87
AU$5.53
+42.9%
19.9%AU$7.38AU$3.92n/a7
Nov ’24AU$3.89
AU$5.55
+42.8%
18.6%AU$7.35AU$4.23AU$5.717
Oct ’24AU$4.23
AU$5.67
+34.1%
17.2%AU$7.38AU$4.24AU$6.217
Sep ’24AU$4.50
AU$5.67
+26.0%
17.2%AU$7.38AU$4.24AU$5.617
Aug ’24AU$5.12
AU$6.23
+21.8%
17.6%AU$8.06AU$4.75AU$7.127
Jul ’24AU$4.90
AU$6.23
+27.4%
17.6%AU$8.06AU$4.75AU$6.667
Jun ’24AU$5.28
AU$6.14
+16.3%
14.1%AU$7.47AU$5.04AU$7.046
May ’24AU$5.45
AU$6.05
+11.0%
15.1%AU$7.42AU$4.96AU$5.976
Apr ’24AU$5.82
AU$6.42
+10.3%
16.9%AU$8.22AU$4.94AU$6.217
Mar ’24AU$6.60
AU$6.25
-5.3%
18.1%AU$8.06AU$4.53AU$5.747
Feb ’24AU$6.70
AU$6.04
-9.8%
21.6%AU$8.61AU$4.55AU$4.947
Jan ’24AU$6.86
AU$6.17
-10.0%
22.4%AU$8.85AU$4.45AU$4.267
Dec ’23AU$6.29
AU$6.04
-4.0%
22.0%AU$8.60AU$4.33AU$3.877
Nov ’23AU$5.17
AU$5.93
+14.7%
22.0%AU$8.47AU$4.39AU$3.897

Analyst Forecast: Target price is less than 20% higher than the current share price.


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