Morningstar puts a2 Milk under review Lex Hall | 11 May 2021Text size
Morningstar has placed infant formula producer a2 Milk under review and is poised to lower its valuation for the narrow-moat company after it reduced the near-term guidance for the fourth time since September last year.
The company had expected full-year fiscal 2021 revenue of NZ$1.4 billion. But because of weak growth in its daigou/reseller channel and a glut of stock, it now expects revenue guidance of NZ$1.2 billion to NZ$1.25 billion.
Additionally, A2M, which relies on its brand power to justify its premium pricing, also expects to increase near-term marketing efforts and write off NZ$80 million to NZ$90 million of expiring inventory.