Today, the 13th round of trade talks between US and Chinese government officials is scheduled to begin, according to ABC News. Investor optimism surrounding a breakthrough in trade talks appears to have led the broader US market to trade in the green. At 1:30 PM ET, the S&P 500 Index and the Dow Jones Industrial Average were up 0.5% and 0.4%, respectively. However, the cannabis sector was down after HEXO (HEXO) announced lower-than-expected fourth-quarter preliminary revenue.
Cannabis ETFs’ performances
HEXO stock tanks
Today, HEXO announced that its preliminary revenue for the fourth quarter of fiscal 2019 would be between 14.5 million Canadian dollars and 16.5 million Canadian dollars. Analysts had expected the company to report revenue of 23.6 million Canadian dollars. Its management blamed the slower opening of new stores, the delay in the legalization of cannabis-derived products, and pricing pressures for its lower revenue. It also withdrew its earlier guidance for fiscal 2020.
All these factors led HEXO stock to hit a 52-week low of 3.60 Canadian dollars. Today, at 1:19 PM ET, the company was trading at 3.80 Canadian dollars, implying a fall of 22.1% from its previous day’s closing price. As of yesterday, the company had returned 3.6% so far in 2019. It’s scheduled to report its fourth-quarter earnings results before the market opens on October 24.
Canopy Growth falls over 8%
HEXO’s revenue warning and withdrawal of its revenue guidance for fiscal 2020 appear to have led Canopy Growth (CGC) (WEED) stock to fall. At 1:19 PM ET, Canopy stock was trading at 27.83 Canadian dollars, a fall of 8.6% from its previous day’s closing price.
As of October 9, the company had lost 16.8% of its stock value so far in 2019. Today, the company announced the appointment of Constellation Brands (STZ) CFO David Klein as chair of its board of directors. For more on analysts’ recommendations, read Canopy Growth Stock Falls after Downgrade.
Aphria was also trading in the red
Aphria is scheduled to report its fiscal 2020 first-quarter earnings results before the market opens on October 15. For a look at analysts’ expectations for its first quarter, check out Aphria: What to Expect from Its Q1 2020 Earnings. In the fourth quarter of fiscal 2019, the company outperformed both analysts’ top and bottom line estimates, which led to a rise in its stock price.
Today, the company was trading 8.9% lower at 1:20 PM ET. HEXO’s lower-than-expected preliminary revenue appears to have led the company’s stock to fall.
Tilray stock falls over 11%
Today, at 1:36 PM ET, Tilray (TLRY) was down 11.4%. TheFly reported that GLJ Research had projected a bearish outlook for Tilray. GLJ Research’s bearish outlook and HEXO’s withdrawal of its revenue guidance for fiscal 2020 appear to have led Tilray stock to fall to a 52-week low of 21.0 Canadian dollars. As of October 9, the company had lost 66.2% of its stock value in 2019. For more on analysts’ recommendations, read Tilray: Are Analysts Optimistic about Its Stock?
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