AU daily stock ratings: Perpetual, Allkem, A2 Milk and more

$The a2 Milk Co Ltd (A2M.AU)$: Citi cuts A2 Milk's target price 32% to A$4.80.

A2 Milk's headwinds look to be increasing, says Citi. The investment bank calls out lockdowns in China resulting in imported infant formula taking longer to reach consumers and the decline in reseller pricing observed through Citi's analysis of A2's product listings on Tmall.

Shares are 1.38% lower at A$5.01.

$Perpetual Ltd (PPT.AU)$: Citi keeps a buy rating on Perpetual and leaves its target price at A$40.00.

Financial-services company Perpetual's proposed takeover of asset manager Pendal is likely accretive, Citi says. Citi expects that a deal would allow Perpetual to leverage its investment in distribution and provide an enhanced product offering for its team to sell.

Shares are 1.30% higher at A$32.80.

$Pepper Money Ltd (PPM.AU)$: Macquarie keeps its outperform call.

While Pepper Money's announcement of the acquisition of 65% of Stratton Finance for A$78 million in cash is small relative to the broader group, the transaction should diversify Pepper's earnings and lead to EPS upgrades, says Macquarie.

Shares are 1.30% lower at A$2.27.

$Allkem Ltd (AKE.AU)$: Bell Potter retains a A$18.05 target on the stock.

Lithium producer Allkem has a strong balance sheet, and with record lithium prices, there's potential for shareholder returns ahead, Bell Potter says. The miner's recent strategy day highlighted that Allkem wants to leverage its portfolio to maintain 10% market share and be a top three producer globally, Bell Potter says.

Shares are 2.83% lower at A$13.04.