** Morningstar lowers fiscal 2026 EBITDA forecast for New Zealand's a2 Milk ATM.NZ by 2% to NZ$306 million ($178.40 million) and their longer-term forecasts by about 5% on average, noting declining birth rates in top target market China

** Brokerage notes most of dairy co's earnings are generated from selling infant formula to China; co's stock has fallen 12.1% since Monday after news that 2025 birth rates in China declined 17% compared to 2024

** "We expect births to continue to decline over the next decade, albeit more gradually," Morningstar says

** However, brokerage adds co can offset fewer babies with price increases and further market share gains, provided consumers continue to place premium on co's brand

** Although, Morningstar expects this to come at higher marketing costs as brands compete in smaller market

** Raises fair value estimate by 16% to NZ$9.30, saying reduction to earnings forecasts is more than offset by lower weighted average cost of capital assumption

** ATM down 10% YTD, after gaining 71.1% in 2025

($1 = 1.7153 New Zealand dollars)

(Reporting by Shruti Agarwal in Bengaluru)

((Shruti.Agarwal@thomsonreuters.com))