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CannTrust: Eight Capital Removed Its Target Price

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On Tuesday, Eight Capital removed its target price for CannTrust Holdings (CTST) (TRST). Eight Capital cited uncertainty about the risks involved in CannTrust’s future operations, as reported by Reuter News. According to the same Reuters report, Eight Capital maintained its “sell” rating for the stock.

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Other analysts’ recommendations for CannTrust

In the above graph, you can see that analysts’ average target price fell in July. CannTrust’s compliance issues started on July 8. The company received a non-compliance report from Health Canada. Since then, Eight Capital, Canaccord Genuity, Cormark, and Haywood Securities have all downgraded the stock and lowered their target prices.

As of Wednesday, two of the six analysts that cover the stock recommend a “buy,” three recommend a “hold,” and one recommends a “sell.” The consensus price target was 5.75 Canadian dollars, which represents an upside potential of 161.3% over the next 12 months.

CannTrust’s stock performance

Following several regulatory issues, CannTrust has lost 66.5% of its stock value YTD. Read CannTrust Down Almost 65% in 2019—What’s Next? to learn more. This year, the stock has underperformed the broader equity market and its peers. During the same period, the S&P 500 Index, the ETFMG Alternative Harvest ETF, and the Horizons Marijuana Life Sciences Index ETF have risen 19.7%, 3.1%, and 5.2%, respectively. Aurora Cannabis (ACB), Curaleaf (CURA), and Cronos Group (CRON) have returned 25.5%, 61.6%, and 5.8%, respectively.

On Wednesday, Aurora Cannabis reported lower-than-expected revenues for the fourth quarter of fiscal 2020. Read Aurora Cannabis: Are Its Q4 Results Good or Bad News? to learn more. The company was trading more than 10% down in the pre-market trading hours today.

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Although Curaleaf reported a lower-than-expected second-quarter performance, its stock rose due to management’s bullish outlook. Cronos Group reported its second-quarter performance on August 8. The company beat analysts’ revenue estimates. However, Cronos Group’s operating losses were higher than analysts’ expectations, which caused the company’s stock price to fall.

What’s next?

Earlier this month, CannTrust’s management announced that its leadership plans to improve its operations and procedures to comply with Health Canada’s regulations. On Tuesday, Investing.com reported that CannTrust might be removed from the Canadian stock index later this month.

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