CannTrust’s performance so far
CannTrust (CNTTF) is one of the worst performers in the cannabis sector (MJ) with a YTD (year-to-date) loss of almost 36% as of August 7. The company’s losses are similar to those of Aphria (APHQF), Supreme Cannabis (SPRWF), and Aurora Cannabis (ACBFF).
The consensus ratings on CannTrust also remained unchanged from the last month. The overall recommendation for the company was a “buy” over the next-12-month period. Out of eight analysts, three had maintained a “strong buy” recommendation on the stock, which was unchanged from the last month, and five analysts maintained a “buy” on CannTrust in August. Once again, no analyst has a “hold” or a “sell” on the stock.
The current consensus price target for CannTrust was 14.3 Canadian dollars, which declined from 14.5 Canadian dollars a month ago. With the closing price of 6.35 Canadian dollars as of August 7, the consensus price target would mean a 125% upside on the stock over the next 12 months. The median price target, however, remained unchanged at 12.88 Canadian dollars.
In this series, we saw that analysts’ ratings and price targets for most of the cannabis stocks remained unchanged from the last month, which indicates that analysts’ views about the fundamentals of the cannabis sector in the near term haven’t changed much. The other side of this coin is that sell-side analysts seldom give “sell” recommendations.
However, most cannabis stocks have been declining, which indicates weakness in investors’ confidence in the sector. Aphria recently reported a loss during its second-quarter earnings. As companies scale up and make investments to meet the demand of the recreational cannabis market, their bottom lines will likely remain in the negative. Perhaps, the prospects of negative earnings may have been the cause of concern for investors.