GW Pharmaceuticals: Target Price and Valuation Update


Oct. 7 2019, Updated 4:12 p.m. ET

A total of 13 analysts are covering GW Pharmaceuticals (GWPH) in October. Nine analysts covered the stock in October 2018. The consensus target price for GWPH is down to $226.85 this month from $227.31 in September, a fall of ~0.20%. GWPH closed at $119.69 on October 4. The company’s current revised target price means a potential upside of ~89.53% over the next 12 months.

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Tracking the trend

Over the trailing-12-month period, the stock has received increased analyst coverage. The number of analysts covering the stock is up from ten in November 2018 to 13 this month. Its price target first dropped from $178.5 in November 2018 to $170.73 in January. In February, it began to gradually increase until it reached $227.46 in August, and then it fell slightly to $226.85 in October.

Analysts’ ratings

Analysts have given GW Pharmaceuticals a consensus “buy” rating. Five analysts have maintained “strong buy” ratings on the stock, while eight given it “buys.”

GW Pharmaceuticals released its second-quarter earnings results in August. In July, four analysts rated the company as a “strong buy,” and eight rated it as a “buy.” Only one analyst called the company a “hold.”

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What are analysts saying about GW Pharmaceuticals?

On October 4, Guggenheim analysts highlighted their confidence in multiple biotechnology stocks, which included GW Pharmaceuticals. Analysts Whitney Ijem, Etzer Darout, Yatin Suneja, and Michael Schmidt expect GW Pharmaceuticals to meet consensus estimates in the third quarter.

On September 27, Oppenheimer analysts Esther Rajavelu and Benjamin Fages lowered the stock’s 12-month target price from $239 to $233. This followed the change in analysts’ revenue projections for the company. Analysts, however, maintained their “outperform” rating on GW Pharmaceuticals.

Since its launch, Epidiolex has already been prescribed to more than 12,000 patients in the US. On September 23, the company also announced the European Commission’s approval of the drug under the brand name EPIDYOLEX. To learn more about this approval, read UK Approves Another Medicinal Cannabis Product.

On August 7, JPMorgan analyst Cory Kasimov reiterated a “buy” rating for GW Pharmaceuticals and set its target price at $232. Cowen & Company analyst Phil Nadeau reiterated a “buy” rating and a target price of $200 on the stock on the same day. Morgan Stanley analyst David Lebowitz maintained an “overweight” rating on GWPH with a target price of $238.

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GW Pharmaceuticals’ share price movements

GW Pharmaceuticals has gained 22.90% YTD (year-to-date). However, the stock is down 12.33% in the last month and 30.87% in the last quarter. According to Barron’s, the stock may be down on safety concerns highlighted by the recently released Favus Institutional Research report.

According to Jim Cramer, writer Elliott Favus has written about the increase in deaths associated with the use of GW Pharmaceuticals’ epilepsy drug, Epidiolex. However, the legendary Mad Money host has refused to jump on the bandwagon of bashers. Instead, he’s opting to watch and wait. He’s also more inclined toward believing in the intensive drug testing conducted by the company. Finally, Cramer also believes that GW Pharmaceuticals’ downward trend reflects the current weakness in the overall cannabis sector. To learn more about Epidiolex, check out Here Are Some of GW Pharmaceuticals’ Key Growth Drivers.

How does GW Pharmaceuticals compare to its peers?

Aurora Cannabis (ACB), Canopy Growth (CGC), and Tilray (TLRY) are a few of GW’s major competitors in the medical marijuana space. Aurora Cannabis, Canopy Growth, and Tilray are down 11.29%, 14.70%, and 65.89%, respectively, YTD. GW Pharmaceuticals has thus been one of the better-performing medical marijuana companies YTD.

Analysts have given Aurora Cannabis a consensus target price of $8.5, implying a potential upside of 93.18%. Canopy Growth’s consensus target price is $34.77, implying a potential upside of 51.70%. Analysts expect a target price of $48.58 for Tilray. This estimate implies a potential upside of 101.91%.

To compare the company’s performance with its peers’, read Comparing GW Pharmaceuticals’ Returns to Peers.


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