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Investing.com - CLSA has upgraded a2 Milk Co (ASX:A2M) (OTC:ACOPF) from Hold to Outperform while raising its price target to AUD10.20 from AUD7.30, representing a potential 20% total shareholder return.
The upgrade follows CLSA’s increased conviction that a2 Milk can continue to gain significant market share in China’s infant milk formula (IMF) market, based on insights gathered during the firm’s Hong Kong Investor Forum and a tour of China.
CLSA has revised its forecasts upward, particularly for fiscal year 2028 and beyond, now projecting that a2 Milk will capture 13% of the Chinese IMF market by 2030.
The research firm maintains a cautious outlook on birth rates in China, noting that successful government stimulus measures to increase births would represent additional upside potential for a2 Milk.
The new price target of AUD10.20 reflects CLSA’s enhanced growth projections for the company, though the firm acknowledges its conservative stance on Chinese demographic trends.
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