A2 Milk Company Ltd (ASX: A2M) shares were hot in February, making solid gains on the previous month.
The A2 Milk share price climbed nearly 5% between market close on 31 January and 28 February.
Let's take a look at why the A2 Milk share prices made gains last month.
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What happened to A2 Milk shares in February?
The A2 Milk share price rose in February, but one bounce, in particular, stood out.
The biggest surge took place on 21 February, on the back of the company's financial results. A2 Milk shares exploded 11% on this day alone.
A2 Milk reported net profit after tax (NPAT) fell 53.3% to NZ$56 million. Revenue also fell 2.5% on the prior corresponding period, but was up 24.8% on H2 2021. The company also improved its outlook for revenue in H2 2022.
CEO and managing director David Bortolussi said:
Despite challenging market conditions in China and COVID-19 volatility, we are making good progress stabilising the business.
We remain confident in the long-term China infant milk formula market, and we are growing share in our China label business in-store and online with strong consumer offtake and share growth.
Analysts responded positively to these results, as my Foolish colleague James reported towards the end of the month. Bell Potter retained its buy rating and placed a $7.70 price target on the A2 Milk share price. This is 40% more than the current share price of $5.51. Bell Potter believes A2 Milk can double its profit by the 2024 financial year.
Meanwhile, Macquarie analysts kept their underperform rating on the company's shares but lifted the price target to $5.60.
A2 Milk shares finished the month on a good note, jumping 3% between market close on 24 February and 28 February. As the Fool reported at the time, analysts at Citi retained their buy rating on the company's shares with a price target of $7.02.
A2 Milk share price snapshot
A2 Milk shares have descended 42% in the past year. Meanwhile, year to date A2 Milk shares have climbed just 1%.
In contrast, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned around 4% over the past year.
A2 Milk has a market capitalisation of about $4.1 billion, based on its current share price.
