Why has the A2 Milk (ASX:A2M) share price spilled 5% in a month?

The A2 Milk share price is yet to recover from its disastrous year in 2021.

| More on:
A young girl sits on her kitchen floor holding a glass of milk with an empty A2 Milk Company bottle next to her and milk puddles on the floor

Image source: Getty Images

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

Key points

  • The A2 Milk share price is in the red and down 5.7% over the past 30 days
  • In the past year, the company's shares have dropped nearly 50%
  • Takeover rumours emerged in late January but no news as yet

The A2 Milk Company Ltd (ASX: A2M) share price is gravitating lower over the past month after diving nearly 50% in a year.

Since the first trading day of 2022 on 4 January, the company's shares have lost 5.7% in value. A2 Milk shares are now trading for $5.25, down 1.31% for the day so far.

Let's take a look at how the past 30 days have played out.

What's moving the A2 Milk share price?

A2 Milk shares have been bouncing around in the past month. The biggest fall took place between 20 January and 24 January, when the shares fell 4%.

A2 Milk is a fresh milk and infant formula company. They sell milk products made from cow's milk that contain the A2 protein type.

Falling revenue in China has plagued the company's share price, with shipments of products between Australia and China severely disrupted by COVID-19.

It may be that Omicron and interest rate fears plaguing the market as a whole between 20-24 January had an impact on A2 Milk. For perspective, the S&P/ASX 200 Index (ASX: XJO) fell nearly 3% during this period.

However, it hasn't been all bad this month for A2 Milk. On 25 January, the A2 Milk share price surged 7% on speculation that it could be a takeover target for the Canadian dairy company Saputo Inc. (TSE: SAP).

However, the company's shares had given back some of these gains by 27 January, falling 3.85%. It may be that investors sold off the shares after the takeover rumour wasn't confirmed. In fact, A2 Milk did not comment on the rumour at all.

A2 Milk will report its FY22 financial year results on Monday 21 February. In FY21, the company reported a 30% fall in revenue to NZ$1.16 billion and a 79.1% reduction in net profit after tax to NZ$80.7 million.

One broker is optimistic about the company's fortunes. My Foolish colleague James reported recently that Bell Potter has a $7.70 price target on A2 Milk shares. That's 46% more than the current price at the time of writing.

A2 Milk share price recap

The A2 Milk share price has fallen by 1.15% over the past 5 days.

That compares to the S&P/ASX 200 Index (ASX: XJO) which is up 2.25% over the same period.

The company commands a market capitalisation of roughly $3.9 billion based on the current share price.

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 Share Market News

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »