Tilray: Big Price Cut after Its Q1 Earnings

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May. 17 2019, Published 4:43 a.m. ET

Tilray’s rating change

Tilray (TLRY) reported its first-quarter earnings on May 14. After the earnings, the stock didn’t move. Investors seemed to be disappointed with the earnings. While the company reported better-than-expected earnings, it missed the bottom line with a wider-than-expected loss during the first quarter. After the earnings, the stock saw a big cut in the consensus target price.

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Target price

In the above chart, you can see that Tilray’s target price has been consistently revised lower since October last year. The current consensus target price is $94.9. The target price was almost 12% lower compared to $107.7 the previous month. Tilray closed at $47.6 on May 16. The current target price implied a return of almost 99% from convergence over the next 12 months. The Horizons Marijuana Life Sciences ETF (HMMJ) closed at 20.3 Canadian dollars on May 16.

Analysts’ rating

As Tilray’s consensus target price dropped, its consensus rating remained unchanged at a “hold” from the previous month. More analysts turned bearish on the stock in May. Three analysts maintained a “buy” rating on the stock, while seven analysts maintained a “hold” rating—compared to four analysts the previous month. One analyst had a “sell” recommendation on the stock, while none of the analysts had a “strong sell” recommendation the previous month.

Peers’ rating

As of May 16, Canopy Growth (WEED), Aurora Cannabis (ACB), and HEXO (HEXO) had a “buy” rating in May. Their target prices are 76.9 Canadian dollars, 14.7 Canadian dollars, and 10.7 Canadian dollars, respectively.

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