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


Jefferies downgraded Canopy Growth Corp.

CGC, -2.60%

WEED, -2.84%

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.

HEXO, -4.91%

HEXO, -4.79%

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

CRON, +0.04%

CRON, -1.65%

to C$10 from C$15, lowered Aurora Cannabis

ACB, -1.21%

ACB, -2.82%

price target to C$7 from C$14, cut Organigram

OGI, +9.74%

to C8.20 from C10.50, cut Green Organic Dutchman

TGODF, +6.07%

TGOD, +6.31%

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.

FLWR, +16.02%

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

SPX, +1.44%

has gained 17%.

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