New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>The a2 Milk Company (ATM) provided a positive update on its supply chain and FY26 guidance.</li><li>As a result, product flows to distributors and retailers have materially improved, and stock levels for both English Label and China Label have returned to targeted levels.</li><li>With uncertainty still relatively elevated and ATM now trading on a 12-month forward PE of ~28x, broadly in line with history, we continue to see a balanced risk–reward profile.</li></ul>

The a2 Milk Company (ATM) provided a positive update on its supply chain and FY26 guidance.As a result, product flows to distributors and retailers have materially improved, and stock levels for both English Label and China Label have returned to targeted levels.With uncertainty still relatively elevated and ATM now trading on a 12-month forward PE of ~28x, broadly in line with history, we continue to see a balanced risk–reward profile.

<ul><li>The a2 Milk Company (ATM) has rebounded more than 30% from its recent lows as concerns around supply chain disruptions and its US product recall have begun to ease.</li><li>There are growing signs that supply conditions are improving, with stage one availability recovering and production stabilising at Synlait Milk (SML), while the ramp-up of Pokeno should materially alleviate supply chain pressures in FY27.</li><li>However, with ATM trading at ~26x our revised FY27 EPS, slightly below history, and our earnings forecasts now below consensus over the next two years, the margin of safety is modestly too narrow to justify a more positive investment stance at this stage.</li></ul>

The a2 Milk Company (ATM) has rebounded more than 30% from its recent lows as concerns around supply chain disruptions and its US product recall have begun to ease.There are growing signs that supply conditions are improving, with stage one availability recovering and production stabilising at Synlait Milk (SML), while the ramp-up of Pokeno should materially alleviate supply chain pressures in FY27.However, with ATM trading at ~26x our revised FY27 EPS, slightly below history, and our earnings forecasts now below consensus over the next two years, the margin of safety is modestly too narrow to justify a more positive investment stance at this stage.

The a2 Milk Company The Milk Is Slowly Starting To Flow

<ul><li>The a2 Milk Company (ATM) has downgraded its FY26 guidance due to supply chain issues.</li><li>A return to its recent elevated multiple is only likely once ATM demonstrates these impacts are transitory.</li><li>Retain NEUTRAL.</li></ul>

The a2 Milk Company (ATM) has downgraded its FY26 guidance due to supply chain issues.A return to its recent elevated multiple is only likely once ATM demonstrates these impacts are transitory.Retain NEUTRAL.

Fisher & Paykel Healthcare Cor / Equity Bottom-Up

<ul><li>We make a number of temporary changes to our company coverage responsibilities with immediate effect due to Matt Montgomerie's period of travel-related extended leave.</li><li>Coverage temporarily transferred to Ben Crozier.</li><li>Matt is due to return in early 2027.</li></ul>

We make a number of temporary changes to our company coverage responsibilities with immediate effect due to Matt Montgomerie's period of travel-related extended leave.Coverage temporarily transferred to Ben Crozier.Matt is due to return in early 2027.

Company Coverage Temporary Coverage Changes

<ul><li>We upgrade our rating on The a2 Milk Company (ATM) to NEUTRAL from UNDERPERFORM.</li><li>Our change in view reflects two factors: (1) notable valuation multiple de-rating from when we downgraded to UNDERPERFORM in September 2025; and (2) ongoing strong execution, opening up earnings upside risk ahead of the 1H26 result (discussed throughout this report).</li><li>Absent earnings upside, we also see numerous potential catalysts over the next six to 12 months: (1) US FDA approval; (2) SAMR registration at a2 Pokeno; (3) competitor recall market share opportunities (albeit we are not convinced on this yet); and (4) further special dividends (our medium-term dividends are well ahead of consensus).</li></ul>

We upgrade our rating on The a2 Milk Company (ATM) to NEUTRAL from UNDERPERFORM.Our change in view reflects two factors: (1) notable valuation multiple de-rating from when we downgraded to UNDERPERFORM in September 2025; and (2) ongoing strong execution, opening up earnings upside risk ahead of the 1H26 result (discussed throughout this report).Absent earnings upside, we also see numerous potential catalysts over the next six to 12 months: (1) US FDA approval; (2) SAMR registration at a2 Pokeno; (3) competitor recall market share opportunities (albeit we are not convinced on this yet); and (4) further special dividends (our medium-term dividends are well ahead of consensus).

The A2 Milk Company A More Balanced Formula—Up To NEUTRAL

New Zealand

Synlait Milk Ltd is a milk production company.  The Company produces, processes, markets and distributes milk, milk powder products and ingredients.

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Synlait Milk (SML NZ)

The a2 Milk Company Bottlenecks Breaking

The a2 Milk Company (ATM) provided a positive update on its supply chain and FY26 guidance. As a result, product flows to distributors and...

Forsyth Barr

The a2 Milk Company The Milk Is Slowly Starting To Flow

The a2 Milk Company (ATM) has rebounded more than 30% from its recent lows as concerns around supply chain disruptions and its US product recall...

Forsyth Barr

The A2 Milk Company A Perfect Storm

The a2 Milk Company (ATM) has downgraded its FY26 guidance due to supply chain issues. A return to its recent elevated multiple is only likely...

Forsyth Barr

Company Coverage Temporary Coverage Changes

We make a number of temporary changes to our company coverage responsibilities with immediate effect due to Matt Montgomerie's period of...

Forsyth Barr

The A2 Milk Company A More Balanced Formula—Up To NEUTRAL

Our change in view reflects two factors: (1) notable valuation multiple de-rating from when we downgraded to UNDERPERFORM in September 2025...

Forsyth Barr

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