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Why the A2 Milk Company Ltd (ASX: A2M) share price is climbing today

A2 Milk Company Ltd (ASX: A2M) had a fantastic year with the share price up over 200%. At the time of writing, the company’s share price was up 5% after being sold down following a disappointing investor presentation by the company on 16 May, which indicated lower revenue in FY18 by around 5%. 

According to analysts, the main reason for the lower forecast revenue is related to a change in the packaging for the baby formula, which resulted in the holding back of some product until the change took place. 

A2 Milk Company sources and supplies the A2 brand of milk in Australia as well as owning the intellectual property. The company also supplies the A2 brand of milk in New Zealand and the United Kingdom. The company is trading on a forward price-earnings-ratio of 40x. 

Other companies bouncing today include Aristocrat Leisure Limited (ASX: ALL) and Metcash Limited (ASX: MTS). 

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Motley Fool contributor Rosemary Steinfort has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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