The a2 Milk Company Ltd [NZX:ATM] has experienced a stock value decrease of 3.58% today. This happened when bearish trading impacted the market.
The company exclusively owns and licences intellectual property for the production of a2 dairy products, which has proven wildly popular with Chinese consumers.
a2 has a strong presence on both the Australian and New Zealand stock exchanges. At the time of writing, the company has a market capitalisation of $11.089 billion and the share price sits at $15.070.
Why has the a2 Milk share price decreased today?
It’s been a day of mixed results. Reports of positive growth have been countered by pandemic fears.
Here are the key highlights:
- a2 Milk is expected to unveil a significant improvement in first half-year earnings.
- Unfortunately, the second half-year earnings may be negatively hit by the spread of the coronavirus.
- China is the largest market for a2 Milk, and the health emergency doesn’t bode well for future prospects.
This lacklustre news has given rise to a negative sentiment. This has led to a sell-off for the company’s shares.
Where could [NZX:ATM] go from here?
For the short- to medium-term, a2 Milk will likely experience a degree of trade disruption.
However, it’s important to note that its position in the infant-formula market still remains strong. Chinese parents have an emotional connection to the a2 brand. They may continue to support it strongly, despite the stormy outlook.
For now, it’s a case of wait-and-see.
Regards,
John Ling,
Contributor, WealthMorning.com