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A2 Milk (ASX: A2M), listed on the ASX, experienced a positive surge in its shares, rising by 3.5% to AU$4.47, reaching its highest point since September 18. This development has stirred interest among investors and market observers, prompting a closer look at the factors influencing A2 Milk's recent performance.
Citi Analysts' Estimates for A2 Milk's Financials
Analysts at Citi have provided estimates for A2 Milk's financial performance, particularly focusing on the net profit after tax (NPAT) for the first half of 2024 (1H24) and the full fiscal year 2024 (FY24). According to Citi, the projected 1H24 NPAT is NZ$73 million ($44.64 million), reflecting a marginal 1% decrease from the year-ago period. However, a more optimistic outlook is forecasted for the entire fiscal year, with an estimated FY24 NPAT of NZ$160 million ($97.84 million), indicating a 3% growth compared to the previous year.
Comparison with Previous Periods
Analyzing the estimated 1H24 NPAT in comparison to the year-ago period provides insights into A2 Milk's financial trajectory. The forecasted growth in FY24 NPAT signals resilience and potential recovery from any challenges faced in the previous fiscal year.
Outlook for 2H Performance
Citi's analysts anticipate a stronger performance in the second half of the fiscal year compared to the first half. This positive outlook contributes to the rising confidence in A2 Milk's stock, as investors consider the company's potential for improved financials.
Citi's "Buy" Rating and Factors Supporting It
Despite the marginal dip in 1H24 NPAT, Citi maintains a "Buy" rating for A2 Milk. The rationale behind this rating includes factors such as a better-than-expected China birth rate in CY23 and other favorable elements that contribute to the analysts' confidence in the dairy producer.
Upcoming Earnings Report
Investor attention is now focused on A2 Milk's upcoming earnings report scheduled for release on Feb. 19. The market eagerly awaits the official financial figures and insights that will shape perceptions of A2 Milk's current health and future prospects.
Analyst Ratings and Stock Performance in 2023
Considering the performance in the previous year, A2 Milk faced a significant challenge, with the stock falling by 38.1% in 2023. The impact of this decline on analyst ratings and investor sentiment is an essential aspect to consider.
Analysts' Median Price Target
As per LSEG data, five out of 10 analysts rate A2 Milk as "Buy" or higher, four suggest "Hold," and one recommends "Sell." The median price target set by these analysts stands at AU$5.13, providing a benchmark for investors and market participants.
