a2 Milk Stock Price Suffers a Shock Plunge of 14.78%

The stock value for The a2 Milk Company Ltd [NZX:ATM] has declined by over 14% today, in bearish trading that has rattled 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 $11.93 billion and the share price sits at $14.36.

Why has the [NZX:ATM] share price decreased today?

In the lead-up to today’s earnings announcement, anticipation among investors was feverish. Market sentiment was buoyed by favourable reports of strong growth in the Chinese marketplace, as well as an uptick in sales volume.

When the accounting numbers were eventually revealed this morning, they appeared to be solid. a2 Milk posted a net profit of $287.7 million, which was up by almost 50% compared to 2018 figures.

However, for restless speculators, this number fell slightly short of what they were expecting, which was a net profit of $297 million.

This has given rise to a bearish response, hence a rapid sell-off of shares.

Where could a2 Milk go from here?

Despite today’s shock response, the outlook for [NZX:ATM] remains positive for the immediate future. Its sales presence and market share has actually increased in China, particularly in the infant nutrition sector.

Once the initial jitters driven by speculation settle down, a2 Milk may be in a strong position to resume its upward trajectory.

Regards,

John Ling,
Contributor, WealthMorning.com

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