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Investors Need To Be Looking At These Price Targets Changes Ahead Of Cannabis Earnings

Jul 25, 2022 • 8:22 AM EDT
2 MIN READ  •  By Michael Berger
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Although the recent rally by the cannabis sector has lost steam, we expect upcoming quarterly earning reports from leading North American operators to determine the performance of the sector in the near-term.

As we get set for earnings season to commence we want to highlight three high profile Canadian Licensed Producer (LPs) which have been issued new ratings and price targets from well-know cannabis investment firms (Barclays, Bank of  America, Canaccord Genuity, Stifel, Haywood, Piper Sandler, PI Financial, and more)

Canopy Growth Corporation (Nasdaq: CGC) (TSX: WEED), embattled Canadian (LP) is set to report earnings in early August and we believe that better-than-expected results would provide a boost to the entire sector.

In late June, the Canadian LP announced a deal with several of its debt-holders to exchange $255.4-million worth of debt for shares and about $3-million in cash as part of its plan to become profitable by 2024.  After the development the following firms reiterated its respective sell rating on Canopy Growth:

  • Canaccord Genuity,
  • CIBC Capital Markets also lowered its price target to C$5 from C$6.50 
  • Piper Sandler & Co. 

n an article from Globe and Mail, CIBC is concerned with how much the balance sheet has deteriorated. After having $4.1 billion of cash in 2018, Canopy Growth reported to have a $135 million net debt position. We are shocked with how much the company has fallen apart following the abrupt firing for founder and former CEO Bruce Linton and look forward to its next yearnings report.

A few weeks after Canopy Growth releases quarterly earnings, Aurora Cannabis Inc. (Nasdaq: ACB) (TSX: ACB) will report its quarterly financial results. Although we are cautiously optimistic with the Canadian LP, a few broker-dealers became bullish on it. 

  • Stifel Nicolaus recently changed its rating on Aurora Cannabis from sell to hold but lowered the price target to C$2.15 from C$2.50 (implies more than 100% upside to current levels).
  • Cantor Fitzgerald also upgraded the Canadian LP to buy from hold and raised  the  price target to C$4.05 from C$3.90 (implies more than 100% upside to current levels).

Last month, HEXO Corp (Nasdaq: HEXO) (TSX: HEXO) reported third quarter financial results and has traded in volatile partner since then. After the earnings report. Canaccord Genutiy lowered its rating to hold and issued it a C$0.25 price target. The target was related to the agreement with Tilray Brands and we will monitor how this aspect of the story evolves from here.

The North American cannabis sector has been one of the hardest hit sectors so far this year. We believe that congress needs to act so these business can use basic business functions, apply for loans, and having access to financial institutions and banks, 

If you are interested in learning more about North American cannabis companies which are going to report quarterly earnings soon, please send an email to support@technical420.com with the subject “Cannabis Earnings Season Updates” to be added to our distribution list. 

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Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.

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