Cresco Labs: Analysts’ Ratings Post Q3 Earnings


Nov. 29 2019, Published 7:37 a.m. ET

Cresco Labs (CRLBF) (CL) reported its third-quarter earnings results after markets closed on November 26. In the quarter, the company missed analysts’ revenue estimate by 5.3%, while its net loss was 83% larger than analysts’ forecast.

The weak third-quarter performance appears to have caused the company’s stock to fall. As of yesterday, Cresco was trading at 7.23 Canadian dollars, 5.6% below its November 26 price. Also, on Tuesday, the company terminated its acquisition agreement with VidaCann, which was first announced on March 18. Let’s look at analysts’ price targets and ratings for Cresco after this news.

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Analysts lower price targets

After Cresco Labs missed analysts’ third-quarter earnings forecasts, PI Financial and Canaccord Genuity reduced their price targets for the stock. PI reduced it from 15 Canadian dollars to 14 Canadian dollars, and Canaccord lowered it from 19 Canadian dollars to 18 Canadian dollars.

As of yesterday, analysts’ average price target for Cresco was 16.71 Canadian dollars, which implies a 12-month return of 131.2%. Their new price target is 6.3% lower than their October 28 target of 17.83 Canadian dollars. As shown in the above graph, analysts’ average target for Cresco stock has fallen gradually.

Meanwhile, peers OrganiGram Holdings (OGI), Cronos Group (CRON), and Aphria (APHA) were trading at 104.1%, 38.8%, and 94.3% discounts to their respective price targets yesterday.

Analysts’ ratings for Cresco Labs

Since Creso reported its Q3 earnings, analysts’ ratings haven’t changed, and they’ve stayed bullish. Of the ten analysts covering the stock, three have rated it as “strong buy,” while seven suggest “buy.” As shown in the graph, Cresco’s coverage has increased this year, from one analyst to ten. Let’s look at analysts’ ratings for Cresco’s peers.

Cresco’s stock performance this year

Cresco Labs stock had fallen 21.8% this year as of yesterday. The company’s weak third-quarter performance, larger-than-expected net losses in the second quarter, and weakness in the cannabis sector have dragged Cresco stock down. Despite the fall, it has outperformed OrganiGram and Cronos, which have fallen 25.4% and 35.5% this year, respectively. Aphria has fallen 18.3% year-to-date. For more cannabis news, check 420 Investor Daily.


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