Motley Fool have put a BUY recommendation on ATM.
Yes, I can hear the skeptics rising on the validity of their advice, but it is what it is, and the SP is rising.
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Motley Fool have put a BUY recommendation on ATM.
Yes, I can hear the skeptics rising on the validity of their advice, but it is what it is, and the SP is rising.
When the world realized all the Hype from the tech sector is crashing down ,the disappointments may turn the investors around to put their money into actual profit stocks to buy and you can't imagine what will happen then.
It's not just MF.....
Goldman Sachs is forecasting earnings before interest, tax, depreciation and amortisation (EBITDA) of NZ$662 million in FY 2021. This will be a 19.9% increase on FY 2020’s EBITDA of NZ$552 million.
On the bottom line, it has penciled in earnings per share of NZ$0.63, up 20% from NZ$0.524 a year earlier.
In light of this growth and the recent pullback in the a2 Milk share price, Goldman thinks the company is trading at a very attractive level.
It explained: “ATM is (currently) trading at an FY21 P/E of 17.9X, a 6% premium to the market compared to its five-year average of a 50% premium.”
On top of that GS projected 20% revenue increase for FY21 is conservative IMHO. I estimate a 25% increase.
As Cgcc points out, it is all about the longer term and ATM outperforming the NZX50 average.
ATM's record in this respect for the last 5 yrs is impeccable. (NZX 50 up about 100%, while ATM up 2400%....NZX is the black line at the foot of this graph.)
Attachment 11969
ATM stands for Above The Market.
ATM takes USA diary producer on over A2 copyright dispute. See link here.
"A2 Milk, which has a market capitalisation of more than $12.4bn, has lodged a counterclaim against Braum’s, which husband and wife team Bill and Mary Braum founded in 1968 and grew to 280 restaurants and “old-fashioned” ice cream parlours across Oklahoma, Kansas, Texas, Missouri and Arkansas......
".......A2 Milk ... says the trademark infringement extended beyond slapping A2 Milk labels on bottles, to ripping off its slogan “feel the difference” versus Braum’s “the A2 difference”, to even poaching its graphics to explain A1 and A2 beta-casein proteins."
Not a great look..... Foreign Multi-national taking on local USA Ma & Pa Business. However, ATM's case is strong. Let's hope it settles out of court in some form of win-win strategic alliance.
MKTUPDTE: ATM: Updated FY21 Outlook
The a2 Milk Company today provides an update to its FY21 outlook statement
which accompanied its FY20 results presentation.
In that statement, we noted that for FY21 there continues to be uncertainty
resulting from COVID-19 and the potential for moderation of economic activity
and that this could have various impacts, including on participants within
the supply chain.
We have also previously advised of a number of issues being experienced
relating to our infant nutrition business as a result of COVID-19. This
included the flow-on effect of pantry destocking continuing into FY21
following the strong sales uplift in 3Q20 and lower than anticipated sales to
retail daigous in Australia, due to reduced tourism from China and
international student numbers.
In September we have started to observe emerging additional disruption to the
corporate daigou / reseller channel, particularly due to the Stage 4 lockdown
in Victoria.
As a result of all these issues, we are now witnessing a contraction in the
daigou channel beyond our previous expectations and without the replenishment
orders that would typically be anticipated at this point.
This disruption in the daigou channel is impacting our September sales and it
is currently anticipated that this will continue for the remainder of the
first half of FY21. Sales in the daigou channel represent a significant
proportion of infant formula sales in our Australia & New Zealand (ANZ)
business and, as such, we now expect ANZ revenue to be materially below plan
for the first half.
However, based on the continuing strong growth in our underlying China IMF
brand health metrics and the performance of the rest of our business, we
believe this to be a single channel logistics issue, as we are continuing to
see strong underlying consumer demand for our brand in China. We are of the
view that this short-term impact to the daigou channel will prove to be
temporary, assuming stabilisation of COVID-19 related issues in Australia.
Performance in all other areas of our business is strong, including our
liquid milk businesses in Australia and the USA. Importantly, our local China
business is performing strongly, notably in Mother & Baby Stores (MBS), which
we anticipate will continue. We also continue to see a positive impact from
the marketing investment in activation and brand building activities from
4Q20. This strong performance continues to be well supported by the on the
ground capability investments we have made over the past 18-24 months.
The increasingly strong underlying brand health metrics we are achieving in
China IMF, including market share and brand awareness for example, confirm
the effectiveness of our continued significant investment in marketing to
drive future growth.
These factors underpin our confidence of a significant improvement in overall
Group performance in the second half of the year once the disruption in the
daigou channel is reduced.
Notwithstanding the significant uncertainty and volatility in market
conditions as a result of COVID-19 we have determined it appropriate to
provide an update to our outlook to include our view of Group revenue as
follows:
- Group revenue for 1H21 of $725 million to $775 million
- Group revenue for FY21 of $1.80 billion to $1.90 billion
- Group EBITDA margin for FY21 in the order of 31%.
It should be noted that the sale of infant formula through the daigou channel
is only one component of our multi-channel and multi-product sales strategy
into China. Our growth plan assumes MBS and CBEC sales will represent an
increasing proportion of our infant nutrition business over time, driven by
the continuing growth in underlying consumer demand.
Geoffrey Babidge
Chief Executive Officer
The a2 Milk Company Limited
Authorised by the Board of Directors
End CA:00360483 For:ATM Type:MKTUPDTE Time:2020-09-28 08:45:07
So could be $1.80b revenue in FY21? FY20 revenue was $1.73b?... I thought this was a growth company?