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June 23, 2020, 2:56 p.m. EDT

Aurora Cannabis reiterated as overweight at Cantor Fitzgerald after latest cost cuts

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By Ciara Linnane

Cantor Fitzgerald raised its price target on Aurora Cannabis Inc. /zigman2/quotes/210559470/composite ACB -0.49% /zigman2/quotes/203734337/delayed CA:ACB -0.15% on Tuesday and reiterated an overweight rating, after the company announced a new set of cost cuts, including cutting its corporate staff by 25% over six months. Analyst Pablo Zuanic raised his price target to C$29 ($21) from C$27 after he talked to the company's chief executive and chief financial officer following an intraday update. "The cuts should allow the company to work with $40-45Mn SGA (sales, general and administrative costs) per quarter in FY21 (less than half the Sep-Mar quarter averages) and improve gross margins by as much as 8 points," he wrote in a note to clients. "Cash flow targets were also confirmed (stable inventories; capex of $25 million for 4Q20 and $10 million per quarter in FY21)." The cuts were planned and are not expected to disrupt operations or stop the company tapping market opportunities. The company sounded more constructive about June quarter trends than Canopy Growth Corp. /zigman2/quotes/200603886/composite CGC +7.82% /zigman2/quotes/202205609/delayed CA:WEED +7.41% , which Zuanic rates as neutral. Aurora shares were slightly higher Tuesday, but have fallen 47% in the year to date, while the Cannabis ETF /zigman2/quotes/213173823/composite THCX +3.71% has fallen 18% and the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.27% has fallen 2.7%.

/zigman2/quotes/210559470/composite
US : U.S.: NYSE
$ 10.22
-0.05 -0.49%
Volume: 2.86M
Aug. 10, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$1.15 billion
Rev. per Employee
$94,401
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/zigman2/quotes/203734337/delayed
CA : Canada: Toronto
$ 13.63
-0.02 -0.15%
Volume: 1.75M
Aug. 10, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$1.54 billion
Rev. per Employee
$123,163
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/zigman2/quotes/200603886/composite
US : U.S.: NYSE
$ 17.93
+1.30 +7.82%
Volume: 11.90M
Aug. 10, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$6.16 billion
Rev. per Employee
$115,039
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/zigman2/quotes/202205609/delayed
CA : Canada: Toronto
$ 23.93
+1.65 +7.41%
Volume: 3.17M
Aug. 10, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$8.24 billion
Rev. per Employee
$150,142
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/zigman2/quotes/213173823/composite
US : U.S.: NYSE Arca
$ 10.33
+0.37 +3.71%
Volume: 37,260
Aug. 10, 2020 4:00p
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/zigman2/quotes/210599714/realtime
US : S&P US
3,360.47
+9.19 +0.27%
Volume: 2.57B
Aug. 10, 2020 5:12p
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