Why is the A2 Milk (ASX:A2M) share price up 5% on Thursday?

Why are A2 Milk shares up 5% today?

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The A2 Milk Company Ltd (ASX: A2M) share price is on fire today. A2 shares are currently up 4.87% at the time of writing to $6.25 a share. This move comes after A2's nasty falls this week.

Since Monday morning, A2 shares were down more than 13% as of yesterday morning. Even after today's rise, A2 Milk shares are still down more than 7% since Monday morning.

Before this week though, A2 shares looked as though they were riding an enthusiastic recovery after sinking as low as $5.04 back in May. In fact, between 18 May and 19 July, this company had risen about 40% from those lows.

So what's going on with A2 Milk today?

Young girl drinking milk showing off muscles.

Image source: Getty Images

A2 Milk share price stages recovery

Well, it's not entirely clear what has sparked this dramatic recovery in the A2 share price this morning. The S&P/ASX 200 Index (ASX: XJO) is up today, but by 0.47% to 7,414 points at the time of writing. Probably not enough to spark a rally of this size in A2 shares on its own.

One possible catalyst could be a market announcement A2 released just after the close of trading yesterday. This announcement outlined some large purchases (as well as some sales) of A2 shares by a series of institutional investors.

These included Commonwealth Bank of Australia (ASX: CBA) and Colonial First State, as well as Citibank Hong Kong, Avanteous InvestmentsNorthern Trust Company and bank/broker UBS. It seems that in these cases, CBA was acting on behalf of the other entities.

The total number of all of these owners' in A2 Milk shares amounts to 5.02% of all A2 Milk shares outstanding, so there is market-moving potential with this announcement.

Where to next for A2 Milk?

One broker who thinks there is a little milk left in the tank for A2, even after today's rise, is investment bank Goldman Sachs. Goldman currently has a 'neutral' rating on A2 Milk shares, with a 12-month share price target of $6.96. That implies a potential upside of just over 11% on today's pricing.

However, not all brokers are quite as bullish. As my Fool colleague Tristan reported earlier this week, brokers Citi and Credit Suisse both have 'sell' ratings on A2 shares presently, with share price targets of $6.05 and $5.50 a share respectively.

There's no doubt as to which broker shareholders would prefer is right here!

At the current A2 Milk Company share price, the company has a market capitalisation of $4.43 billion.

Motley Fool contributor Sebastian Bowen owns shares of A2 Milk. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Consumer Staples & Discretionary Shares

A couple sit in front of a laptop reading ASX shares news articles and learning about ASX 200 bargain buys
Consumer Staples & Discretionary Shares

Bapcor reaffirms FY26 EBITDA guidance

Bapcor has confirmed its FY26 underlying EBITDA guidance, providing further clarity for investors.

Read more »

a woman looks at her phone while making a transaction at the counter of a store where racks of clothing can be seen in the background.
Earnings Results

Premier Investments updates investors on FY26 sales and outlook

Premier Retail sales are down in FY 2026.

Read more »

Smiling man at the wheel of a car.
Earnings Results

Amotiv Ltd FY26 earnings steady, dividend lifted

The auto parts retailer is paying a full year dividend of 43 cents per share.

Read more »

A man and woman watch their device screens, making investing decisions at home.
Consumer Staples & Discretionary Shares

Accent Group share price in focus as Frasers releases updated bidder's statement

The Accent Group share price is in focus after Frasers released a supplementary bidder’s statement challenging Accent’s value assessment.

Read more »

Woman sits cross legged on bed drinking a glass of wine and holding TV remote control.
Consumer Staples & Discretionary Shares

Treasury Wine Estates writes down US assets, posts higher FY26 EBITS

The wine giant has announced a further $558.4 million post-tax non-cash write-down on its US assets.

Read more »

two men shake hands on a deal.
Consumer Staples & Discretionary Shares

Tabcorp to acquire BetMakers in $267 million growth-focused deal

The company expects the acquisition to accelerate its strategy across multiple areas

Read more »

A car dealer stands amid a selection of cars parked in a showroom.
Earnings Results

CAR Group Limited FY26 earnings: revenue and profit rise

The auto listings company expects double digit growth in FY 2027.

Read more »

happy investor, celebrating investor, good news, share price rise, up, increase
Earnings Results

Nick Scali shares in focus after 22% NPAT jump in FY26 earnings

The furniture retailer reported a 22% jump in net profit.

Read more »