Canopy Growth Corporation reported mixed fourth-quarter earnings results Thursday. The company reported a year-over-year decrease in earnings per share and an increase in net revenue.

The Experts

Eric Choe, founder of StockDweebs, says Canopy Growth is well-positioned to rally from the production, distribution and sale of its cannabis products despite the recent downfall.

“It relies primarily on retail traffic and the sale of medicinal and recreational cannabis products - this could boost overall sales and top-line figures once stores start opening post-COVID,” Choe said.

Cantor Fitzgerald’s Pablo Zuanic says Canopy Growth has much downside risk following a poor fourth-quarter report. 

The analyst named four downside risks for Canopy Growth:

  • Worsening industry capacity glut in Canada
  • Poor start to Cannabis 2.0, with the potential growth worsened by further regulation and slow opening of stores
  • No positive new news on international med/CBD
  • Misuse of the remaining cash holdings

The Price Targets

Zuanic has a Neutral rating on Canopy Growth with a CA$27 price target. 

Choe set his price target at $39.95 based on a technical analysis, with a fair intrinsic value of $25.54.

Canopy Growth shares were down 19.37% at $17.52 on Friday at the time of publication. The stock has a 52-week high of $44.17 and a 52-week low of $9.

Latest Ratings for CGC

Feb 2020Stifel NicolausMaintainsBuy
Jan 2020BMO CapitalUpgradesMarket PerformOutperform
Nov 2019Bank of AmericaUpgradesNeutralBuy

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