Bulletin
Investor Alert

Market Pulse Archives

Feb. 25, 2020, 8:12 a.m. EST

Aurora Cannabis initiated as hold at Needham on concerns of liquidity risk in the second half

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Aurora Cannabis Inc. (ACB)
  • X
    Aurora Cannabis Inc. (ACB)
  • X
    ETFMG Alternative Harvest ETF (MJ)

or Cancel Already have a watchlist? Log In

By Ciara Linnane

Needham initiated coverage of Aurora Cannabis Inc. /zigman2/quotes/210559470/lastsale ACB +13.81% /zigman2/quotes/203734337/delayed CA:ACB +15.87% on Tuesday with a hold rating and $1.50 price target. Analysts Matt McGinley and Evan Greenblatt said the company has established itself as a low cot producer of cannabis, but remains deeply unprofitable and has to scale back its operating structure while attempting to grow revenue. "We expect restructuring to produce an entity capable of generating positive EBITDA by F1Q21, but any shortfalls in cost reduction or market development places the company at liquidity risk in 2H20," the analysts wrote in a note to clients. The Canadian cannabis market is structurally impaired with a shortage of retail stores clashing with excess production capacity, price pressures from the black market, challenging branding rules and limited signs that Cannabis 2.0 will have a meaningful impact in the first half. "We are optimistic that Canada will work through some of these issues over the next 2-years, but don't expect to see many of the 300 LPs in Canada make it to that point," the Needham analysts wrote. Aurora shares rose 2.6% premarket in a rebound from Monday's steep selloff across all markets. The stock has fallen 79% in the last 12 months, while the ETFMG Alternative Harvest ETF /zigman2/quotes/204332491/lastsale MJ +0.17% has fallen 57% and the S&P 500 /zigman2/quotes/210599714/realtime SPX -3.37% has gained 15%.

/zigman2/quotes/210559470/lastsale
US : U.S.: NYSE
$ 1.03
+0.13 +13.81%
Volume: 128.36M
March 27, 2020 6:30p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$1.20 billion
Rev. per Employee
$94,401
loading...
/zigman2/quotes/203734337/delayed
CA : Canada: Toronto
$ 1.46
+0.20 +15.87%
Volume: 27.64M
March 27, 2020 4:41p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$1.71 billion
Rev. per Employee
$123,163
loading...
/zigman2/quotes/204332491/lastsale
US : U.S.: NYSE Arca
$ 12.13
+0.02 +0.17%
Volume: 1.00M
March 27, 2020 8:00p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
2,541.47
-88.60 -3.37%
Volume: 3.59B
March 27, 2020 5:12p
loading...

This Story has 0 Comments
Be the first to comment
More News In
Industries

Story Conversation

Commenting FAQs »
Link to MarketWatch's Slice.