Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Are a2 Milk Company Ltd (A2M) Shares Worth $14?

The a2 Milk Company Ltd (ASX: A2M) share price has grown tremendously over the past five years, delivering multibagger returns for long-run investors.

a2 Milk Share Price V. All Ordinaries (XAO)

a2-milk-a2m-asx-a2m-share-price
Source: Google Finance

The a2 Milk Company is one of Australia and New Zealand’s largest infant formula producers and the leader in a2-only protein-based dairy products. It has operations in New Zealand, Australia and China thanks to key supply and distribution agreements with the likes of Synlait Milk (ASX: SM1).

What Analysts Think Of A2 Milk Company

According to The Wall Street Journal 12 analysts cover a2 Milk shares in detail. Of the 12, five have a hold rating, four rate the shares as a buy and three say sell.

The even spread of views might give you a hint at what the ‘average’ valuation provided by the analysts…

The analysts’ average intrinsic valuation is $14.04, which is less than 5% more than the current a2 Milk share price. That’s not enough for most value-conscious investors to have a reliable ‘margin of safety’ and say definitely if it’s good value.

Valuation & Share Prices – Knowing The Difference

Warren Buffett famously said the price is what you pay, the value is what you get.

For investors who know what they are doing, share valuation is far more important to generating significant long-term returns than share price.

What makes it tricky is simply taking another investor or analyst’s valuation and running with it is dangerous because the valuation is based on a set of assumptions made by him or her. For example, to get to an a2 Milk valuation of $14 could use unrealistic expectations or fail to appreciate the supply-side risks, as we saw when Bellamy’s Australia Ltd (ASX: BAL) pushed too much supply into the Chinese market.

This free video series from Rask Finance explains valuation in great detail:

Buy, Hold or Sell

As can be seen in the share price chart above, growth shares like a2 Milk can be great. But, they can also extremely risky, so it’s vital to go into an investment with your wits about you. Focus on the potential risks and rewards.

If you’re considering buying a2 Milk shares we suggest taking a look at other similar, fast-growth ASX companies before taking the plunge. In the free report below we’ve identified two of our favourite ASX shares that might be just at the start of their growth runways — it could be like buying a2 Milk shares five years ago.

[ls_content_block id=”14947″ para=”paragraphs”]

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Skip to content