A2 Milk Co.'s stock plummeted 16.37% during intraday trading on Monday, marking a significant decline for the infant formula manufacturer.

The sharp drop follows the company's voluntary recall of three batches of its a2 Platinum USA infant milk formula sold in the United States. The recall was initiated after the detection of cereulide, a toxin, in product manufactured by supplier Synlait Milk. While the company stated no illnesses have been reported and the recall is not expected to impact financial results, analysts have raised concerns about potential brand damage.

Citi identified risks from the recall, noting it could spread on social media in China—a critical market for a2 Milk—and potentially damage the brand. The investment bank also highlighted uncertainty over whether this incident could affect the company's push for permanent access to the U.S. market for its infant formula products, calling it "another unfortunate example of a2 Milk encountering supply chain challenges."