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Oct. 11, 2019, 8:38 a.m. EDT

Canopy Growth downgraded by Jefferies as analysts slash price targets on sector by average 50%

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By Ciara Linnane

Jefferies downgraded Canopy Growth Corp. /zigman2/quotes/200603886/composite CGC -7.78% /zigman2/quotes/202205609/delayed CA:WEED -7.64% on Friday and slashed its stock price targets for cannabis companies by an average of 50%, a day after a revenue warning from Hexo Corp. /zigman2/quotes/206508254/composite HEXO -6.00% /zigman2/quotes/200008967/delayed CA:HEXO -6.60% prompted a sharp selloff in the sector as investors moved to price in heightened risk. "With a number of negative headlines impacting the sector the last 6 months, and still with little sign of profitability, the sector has seen greater risk/volatility priced in," analysts Owen Bennett and Ryan Tomkins wrote in a note to clients. The analysts downgraded Canopy, the market leader, to hold from buy and cut their price target to C$25 ($18.8) from C$77. The analysts cut Hexo's stock price target to C$3.80 from C$7.70, cut Cronos /zigman2/quotes/206842762/composite CRON -9.22% /zigman2/quotes/202715342/delayed CA:CRON -8.77% to C$10 from C$15, lowered Aurora Cannabis /zigman2/quotes/210559470/composite ACB -3.86% /zigman2/quotes/203734337/delayed CA:ACB -4.76% price target to C$7 from C$14, cut Organigram /zigman2/quotes/209289540/lastsale OGI -4.50% to C8.20 from C10.50, cut Green Organic Dutchman /zigman2/quotes/204266798/delayed TGODF -3.00% /zigman2/quotes/206870535/delayed CA:TGOD -2.82% to C$2.40 from C$6.50 and lowered Tilray's price target to $25 from $57. At the same time, they upgraded Hexo to hold from underperform and upgraded Organigram and Flowr Corp. /zigman2/quotes/206895064/delayed CA:FLWR 0.00% to buy from hold. "The next 12 months price performance should see strong divergence between those who can execute/move to profit and the rest," the analysts wrote. Canopy shares fell 1.8% premarket. The stock has fallen 24% in 2019, while the ETFMG Alternative Harvest ETF has fallen 25% and the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.90% has gained 17%.

Read the full story:
Cannabis stocks mostly higher after major rout but concerns about lack of profit persist

/zigman2/quotes/200603886/composite
US : U.S.: NYSE
$ 22.65
-1.91 -7.78%
Volume: 9.38M
Jan. 24, 2020 6:30p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$7.90 billion
Rev. per Employee
$115,039
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/zigman2/quotes/202205609/delayed
CA : Canada: Toronto
$ 29.76
-2.46 -7.64%
Volume: 3.68M
Jan. 24, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$10.37 billion
Rev. per Employee
$150,142
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/zigman2/quotes/206508254/composite
US : U.S.: NYSE
$ 1.41
-0.09 -6.00%
Volume: 6.02M
Jan. 24, 2020 6:30p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$383.72 million
Rev. per Employee
N/A
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/zigman2/quotes/200008967/delayed
CA : Canada: Toronto
$ 1.84
-0.13 -6.60%
Volume: 3.46M
Jan. 24, 2020 4:23p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$500.74 million
Rev. per Employee
N/A
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/zigman2/quotes/206842762/composite
US : U.S.: Nasdaq
$ 7.58
-0.77 -9.22%
Volume: 16.62M
Jan. 24, 2020 4:00p
P/E Ratio
8.64
Dividend Yield
N/A
Market Cap
$2.61 billion
Rev. per Employee
$55,248
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/zigman2/quotes/202715342/delayed
CA : Canada: Toronto
$ 9.99
-0.96 -8.77%
Volume: 1.65M
Jan. 24, 2020 4:21p
P/E Ratio
8.57
Dividend Yield
N/A
Market Cap
$3.43 billion
Rev. per Employee
$70,780
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/zigman2/quotes/210559470/composite
US : U.S.: NYSE
$ 1.99
-0.08 -3.86%
Volume: 22.71M
Jan. 24, 2020 6:30p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$2.17 billion
Rev. per Employee
$94,401
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/zigman2/quotes/203734337/delayed
CA : Canada: Toronto
$ 2.60
-0.13 -4.76%
Volume: 5.50M
Jan. 24, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$2.83 billion
Rev. per Employee
$123,163
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/zigman2/quotes/209289540/lastsale
US : U.S.: Nasdaq
$ 2.76
-0.13 -4.50%
Volume: 4.33M
Jan. 24, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$451.46 million
Rev. per Employee
$49,972
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/zigman2/quotes/204266798/delayed
US : U.S.: OTC
$ 0.52
-0.02 -3.00%
Volume: 906,001
Jan. 24, 2020 3:58p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$164.00 million
Rev. per Employee
$8,428
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/zigman2/quotes/206870535/delayed
CA : Canada: Toronto
$ 0.69
-0.02 -2.82%
Volume: 2.30M
Jan. 24, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$215.75 million
Rev. per Employee
$10,924
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/zigman2/quotes/206895064/delayed
CA : Canada: TSX Venture
$ 1.84
0.00 0.00%
Volume: 82,721
Jan. 24, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$128.72 million
Rev. per Employee
N/A
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/zigman2/quotes/210599714/realtime
US : S&P US
3,295.47
-30.07 -0.90%
Volume: 2.11B
Jan. 24, 2020 5:00p
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