July 15, 2020, 8:23 a.m. EDT

GW Pharmaceuticals stock slips after Stifel analyst backs off long-standing bullish view

Shares of GW Pharmaceuticals PLC (NAS:GWPH) fell 0.4% in premarket trading, after Stifel Nicolaus analyst Paul Matteis downgraded the maker of the cannabis-derived epilepsy drug Epidiolex, citing disappointing physician feedback regarding "off-label" use of the drug. Matteis cut his rating to hold after being at buy for at least the past two years, and cut his stock price target to $140 from $150. Matteis stressed that the downgrade wasn't a call on GW's second quarter results, which are expected in early August, as he thinks the company will beat expectations as the impact of COVID-19 doesn't seem as bad as projected. "Instead, what's led to a change in our view is conservative physician expectations for Epidiolex use in 'off-label' refractory epilepsy, whereas we believe substantial uptake here is: 1) key to the bull case; and 2) necessary to meet or beat 2021-2025 consensus sales projections," Matteis wrote in a note to clients. The stock has run up 40.3% over the past three months through Tuesday, while the Cannabis ETF (PSE:THCX) has climbed 22.5% and the S&P 500 (S&P:SPX) has advanced 14.9%.

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