By Steve Gelsi
Tilray Inc. is not expected to turn a profit in its fiscal fourth quarter when it delivers its latest results on Thursday, but analysts have at least held steady on their projected loss for the cannabis company.
Wall Street analysts that follow Tilray /zigman2/quotes/209129655/composite TLRY +0.40% /zigman2/quotes/226578748/delayed CA:TLRY +0.29% expect the company to lose 8 cents a share on revenue of $151.1 million, according to estimates from FactSet. The consensus estimate hasn’t changed since the end of the first quarter on March 31.
Jefferies analyst Owen Bennett on Tuesday reiterated his buy rating on Tilray and cut his price target to $12.10 from $15.60.
Bennett expects a mixed quarter for Tilray, with continued market share losses, price pressure in Canada and European foreign exchange rates weighing on results.
Despite this gloom, trends in Canada have started to improve since the end of its fiscal quarter on May 31 and other parts of the business such as its Breckenridge drinks unit remain encouraging, he said.
Tilray will also get a boost from its alliance with Hexo Corp. /zigman2/quotes/206508254/composite HEXO -0.74% after it agreed to acquire debt of the smaller Canadian player earlier this year.
“Although recent Canada adult-use performance has been unhelpful, post the quarter, and following the price actions, there have been signs of improvement, with Tilray returning to market share gains in the latest two months,” Bennett said. “Likely control of Hexo in the near future should also further strengthen its position.”
Other positives include its roughly 20% share of the German cannabis market, as well as its alliance with Amazon.com’s Inc.’s /zigman2/quotes/210331248/composite AMZN +1.26% Whole Foods Market for its Manitoba Harvest hemp products unit, he said.
Benchmark analyst Mike Hickey on Monday reiterated a hold rating on Tilray and said the company’s market share fell to 10.2% from 12.8% sequentially in the third quarter.
“We aren’t convinced that TLRY can deliver sustained market share gains in the premium flower category,” Hickey said.
Tilray shares have fallen 54.8% in 2022, including a drop of nearly 6% on Wednesday. The Cannabis ETF /zigman2/quotes/213173823/composite THCX +2.61% has lost 56.8% of its value in 2022 and the Nasdaq /zigman2/quotes/210598365/realtime COMP +1.74% is off by 24.3%.
Among big Canadian cannabis names, Aurora Cannabis /zigman2/quotes/210559470/composite ACB +4.83% /zigman2/quotes/203734337/delayed CA:ACB +5.62% reports quarterly results on Sept. 27, Canopy Growth Inc. /zigman2/quotes/200603886/composite CGC -0.57% /zigman2/quotes/202205609/delayed CA:WEED -0.42% provides its quarterly update on Aug. 5 and Village Farms International /zigman2/quotes/207525872/composite VFF +0.24% reports on Aug. 15.
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