Earnings season for the cannabis industry is kicking into high gear with leading Canadian Licensed Producers (LPs) Canopy Growth Corporation (TSX: WEED) (Nasdaq: CGC) and Cronos Group Inc. (TSX: CRON) (Nasdaq: CRON) getting ready to report earnings tomorrow.
Last week, Tilray, Inc. (TSX: TLRY) (Nasdaq: TLRY) reported fourth quarter financial results and was the first large Canadian LP to do so. The quarter was Tilray’s first earnings report following the completion of the merger with Aphria and the market initially responded favorably to the numbers, sending shares more than 10% higher after the release.
Although Tilray received a favorable response from the market, several broker-dealers issued new price targets on the Canadian LP after the quarterly results that we highlighted below:
- July 28th – Alliance Global Partners lowered its price target to $17 from $18
- July 30th – Stifel lowered its price target to $14 from $16
- August 4th – Jefferies raised its price target to $27 from $23
After the post-earnings rally, Tilray has come under pressure and has come well off its recent highs. The price target from Jefferies implies that there is more than 90% upside potential to current levels (as of August 4th) and we find this to be significant. The broker-dealer’s price target is well above many of its peers and we will monitor how Tilray performs from here.
Later this week, Canopy Growth and Cronos Group will report quarterly financial results and we will monitor how the market responds to the numbers. If the companies follow Tilray’s initial trend, we believe the market could respond very favorably to the earnings reports and our readers should be aware of this possibility.
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