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UBS maintains support for A2 Milk Company Ltd (ASX:A2M)

Formula prices are falling in China, but UBS analysts are optimistic about the outlook for A2 Milk Company Ltd (ASX: A2M), according to The Australian.

According to the report UBS has a neutral rating on the company, with a recent visit to China “reaffirming” its robust medium term outlook for A2 Milk.

Goldman Sachs is also fond of the company, expecting it to net good earnings results through to FY20, but investors are no doubt spooked by A2’s share price drop of 24% from its late March 52-week high of $13.17 to sit at $9.95 at the time of writing.

Baby formula star stock Bellamy’s Australia Ltd (ASX: BAL) will likely register the impact of price cuts in China, with its share price already slipping 46% from its own late March 52-week high of $22.52 to sit at $12.17 at the time of writing.

Bubs Australia Ltd (ASX: BUB) and Wattle Health Australia Ltd (ASX: WHA) are smaller players in the sector with Bubs managing to maintain its share price over the past 6 months while Wattle’s shares have slipped.

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Motley Fool contributor Carin Pickworth 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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