Citi downgraded A2 Milk Company to Neutral from Buy. The firm notes a2 continues to do a commendable job executing in a challenging market. However, the medium- to longer-term outlook remains challenging primarily due to birth rate pressures, which has resulted in a2 pushing out its medium-term revenue target, which is reliant on China label innovation that can only occur when/if a2 obtains more China label SAMR slots, a process which is taking longer than expected, Citi says.
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