Will A2 Milk Shares Rebound for Big Returns in 2024?

December 21, 2023 04:19 PM AEDT | By Team Kalkine Media

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Will A2 Milk Shares Rebound for Big Returns in 2024? — Image source: shutterstock

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A2 Milk Company Ltd (ASX: A2M) shares are exhibiting positive momentum in Thursday's trading session, with a 0.5% increase to $4.22. Despite this short-term uptick, A2 Milk shares have faced challenges throughout the year, currently set to record a decline of 38% for 2023.

However, some brokers see potential for a rebound in A2 Milk shares in 2024, offering a more optimistic outlook. Bell Potter, though currently maintaining a hold rating, has a price target of $4.85, indicating a potential upside of 16%. Citi analysts, with a buy rating and a $4.74 price target, suggest a 13% increase from the current trading levels. This analysis reflects the dynamics in ASX consumer stocks, providing insights into the performance and potential future trajectory of A2 Milk Company Ltd shares.

The most bullish outlook comes from Morgans, whose analysts have assigned an add rating and set a $5.40 price target. If A2 Milk shares reach this level, it would signify a substantial gain of almost 30% for investors. Morgans emphasized A2M's strong brand, robust balance sheet, and competent management team, highlighting a 30% upside to their valuation of $5.40.

The primary challenge for A2 Milk in recent times has been its performance in the Chinese market. Evolving consumer preferences, new standards, and a declining birth rate have presented difficulties. Investors will closely monitor the company's performance in China, with half-year results expected in February. Despite the short-term uncertainties, analysts at Morgans are optimistic about growth prospects in FY 2025 and FY 2026, anticipating a resumption of decent growth after a transitional period in FY 2024.

While challenges persist, A2 Milk's potential rebound in the Chinese market and the optimistic projections from various brokers suggest that 2024 could bring a more favorable outlook for the company's shares, with the possibility of significant gains. Investors will be keenly watching A2 Milk's strategic initiatives and financial performance for signals of recovery and growth in the coming year.

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