Stifel cuts cannabis industry perspective as analysts weigh Tilray


Stifel analyst W. Andrew Carter on Monday reported the organization continues to approach the cannabis sector with “negative total bias” amid a decreased outlook for the U.S. current market and lackluster performance in the hydroponics sector.

Carter trimmed his perspective for the overall 2022 U.S. cannabis sales to $27.2 billion from an before estimate of $28.6 billion amid decelerating classification progress, oversupply, outsized force on reduced money purchaser paying, climbing input cost
inflation and improved capital prices.

Stifel reiterated provide ratings on Aurora Hashish
CA:ACB

ACB
and Canopy Growth
CGC

CA:WEED
due to the fact of an “increasingly challenging Canadian industry.” The brokerage minimize its Aurora Hashish value concentrate on to C$3.00 from C$3.50 and trimmed Canopy Growth’s rate goal to C$6 from C$7.50.

Cannabis program maker WM Technological know-how Inc.
MAPS
stands out as “the most effective positioned” hashish name to capitalize on classification development, with shares that proceed to undervalue a “robust” progress outlook, he reported. WM Technology’s selling price target was lowered by $1 to $10 a share.

Carter also stays “increasingly positive” on Altria Team Inc.
MO
-backed Cronos Group Inc.
CRON

CA:CRON
on power in its Spinach cannabis company, as properly as components seller GrowGeneration Corp.
GRWG
on its offer chain expertise. Cronos’s price concentrate on was established at $4 a share, while GrowGeneration’s price tag concentrate on was trimmed to $8.50 a share from $9.

Stifel shaved its 2022 earnings check out on ScottsMiracle-Gro Co.
SMG
to $7.31 a share from $8.02 a share on weakness in its Hawthrorne hydroponics small business and an total economic downturn in the small business. Stifel reduce its selling price goal on the company to $130 a share from $160 a share.

“We now estimate a fewer fulsome restoration for Hawthorne… supplied colder weather, and higher enter charges,” Carter reported. “But with our reductions, we imagine the earnings progress profile stays undervalued.”

Also Browse: Scotts Miracle-Gro-backed RIV Cash getting New York hashish firm Etain

Stifel reduce its Hydrofarm Holdings Team Inc.’s
HYFM
2022 earnings estimate to $573 million from $595 million as it competes with marketing endeavours from Hawthorne. Stifel slashed its Hydrofarm cost concentrate on to $13 a share from $33.

Shares of Hydrofarm Keeping are down 65.8% in 2022, but the inventory rose 1.7% on Monday. Scotts Miracle-Gro shares rose 3.7% on Monday, but the inventory has misplaced 33% so much this calendar year.

In the meantime, Alliance World-wide Partners analyst Aaron Grey on Monday slash his target value on Tilray
CA:TLRY

TLRY
to $5.50 a share from $8.00 and reiterated a neutral score on the inventory after the enterprise held an analyst working day previous week.

Though the corporation reiterated its approach to grow earnings to $4 billion in 2024 from about $630 million in 2022, that path “embeds a quantity of factors outside its control” these kinds of as the legalization of grownup use hashish in the U.S. and Germany and “more rational” market disorders in Canada, Grey stated.

While reaching $4 billion “could verify a tough task” devoid of acquisitions over and above those people by now embedded, Tilray delivers some vibrant spots, these as 12 consecutive quarters of Ebitda and favourable cash stream on the horizon, as well as its tactic of adding “self-sustaining” organizations in the U.S. this kind of as its drinks as it awaits catalysts for a lot more development, Grey said.

Shares of Tilray rose 2% on Monday. The inventory is down 27.7% so significantly this yr.

Overall, inventory general performance in the hashish sector remains weak. The AdvisorShares Pure Hashish ETF
MSOS
has lost 41.2% of its worth in 2022, compared to a drop of 20.3% by the Nasdaq. The Hashish ETF
THCX
has dropped 33.4% so significantly in 2022.

Also Browse: Traders in cannabis corporations burned by inventory-sector losses in 2021 even as the pot small business grows



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