Here's What Analysts Are Forecasting For The a2 Milk Company Limited (NZSE:ATM) After Its Full-Year Results

It's been a sad week for The a2 Milk Company Limited (NZSE:ATM), who've watched their investment drop 17% to NZ$6.20 in the week since the company reported its full-year result. It looks like the results were a bit of a negative overall. While revenues of NZ$1.7b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.0% to hit NZ$0.23 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for a2 Milk

Taking into account the latest results, the current consensus from a2 Milk's 14 analysts is for revenues of NZ$1.77b in 2025. This would reflect an okay 5.9% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 6.5% to NZ$0.25. Yet prior to the latest earnings, the analysts had been anticipated revenues of NZ$1.81b and earnings per share (EPS) of NZ$0.27 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the NZ$6.96 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on a2 Milk, with the most bullish analyst valuing it at NZ$8.00 and the most bearish at NZ$6.30 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the a2 Milk's past performance and to peers in the same industry. It's clear from the latest estimates that a2 Milk's rate of growth is expected to accelerate meaningfully, with the forecast 5.9% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 2.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.3% annually. a2 Milk is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at NZ$6.96, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for a2 Milk going out to 2027, and you can see them free on our platform here..

You still need to take note of risks, for example - a2 Milk has 1 warning sign we think you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.