This week has been tough for the cannabis sector. In the first four days of trading, the ETFMG Alternative Harvest ETF (MJ) and the Horizons Marijuana Life Sciences Index ETF (HMMJ) have fallen by 12.5% and 14.6%, respectively. Both Cronos Group (CRON) and Canopy Growth (CGC) (WEED) reported lower-than-expected earnings this week, which dragged the sector down.
Yesterday, Aurora Cannabis (ACB) reported its first-quarter earnings after the market closed. Although it outperformed analysts’ EBITDA and net profit estimates, it fell short of analysts’ revenue expectations. Also, the company announced that it would scale down its expansion plans, citing weaker demand for cannabis in Canada and around the world.
The management’s announcement appears to have caused the stock to fall, dragging the sector down. Today at 12:58 PM ET, Aurora Cannabis was trading 10.5% lower. Meanwhile, MJ and HMMJ were down by 1.8% and 1.6%, respectively.
Analysts lower their price targets for Aurora Cannabis
Today, several analysts lowered their price targets for Aurora Cannabis following its announcement that it would scale down its expansion. Cowen and Company lowered its price target from 8 Canadian dollars to 6 Canadian dollars.
Canaccord Genuity reduced its price target from 8 Canadian dollars to 6 Canadian dollars. Plus, Scotiabank cut its price target from 8.75 Canadian dollars to 4 Canadian dollars. Aurora Cannabis has already lost 35.4% of its stock value as of November 15.
Canopy Growth continues to fall
After falling 14.3% yesterday, Canopy Growth (CGC) (WEED) continued to fall today as well. At 12:59 PM ET, the company was trading at 3.7% lower. Following its dismal performance in the second quarter, Comark Securities, Cowen and Company, Stifel, Benchmark, Compass, CIBC, PI Financial, and Piper Jaffray all lowered their price targets today. It looks like this price target action pushed the company’s stock price down. Notably, Canopy Growth has lost 41.7% of its stock value as of November 14.
TGOD’s Q3 earnings report
Yesterday, The Green Organic Dutchman Holdings (TGOD) (TGODF) reported its third-quarter earnings after the market closed. The company reported Q3 revenues of 2.6 million Canadian dollars. Its net losses came in at 20.1 million Canadian dollars.
Further, the company announced that it had signed agreements to receive 103 million Canadian dollars in funding to finance its growth initiatives. However, investors didn’t seem impressed by the company’s third-quarter earnings. Today, at 12:59 PM ET, TGOD stock was trading 12.1% lower.
Cronos Group fall over 7%
On November 12, Cronos Group reported its third-quarter earnings. For the quarter, the company posted revenues of 12.7 million Canadian dollars, which fell short of analysts’ estimate of 14.14 million Canadian dollars. Its adjusted EBITDA was also lower than analysts’ expectations.
For more on Cronos Group’s third-quarter performance, please read Cronos Group’s Q3 Earnings: Good or Bad News? Following its weak third-quarter performance, Cowen and Company cut its price target from 12 Canadian dollars to 10 Canadian dollars today. In our view, Cowen’s price cut and weakness in the cannabis sector appear to have caused Cronos Group’s stock to fall. At 1:00 PM ET, the company was trading 7.2% lower.
Please check 420 Investor Daily for more on cannabis-related news and updates.