New Coverage
GLOBE says new coverage rates Canopy "sector perform"
2024-06-19 07:59 ET - In the News
The Globe and Mail reports in its Wednesday, June 19, edition that ATB Capital Markets analyst Frederico Gomes has started coverage on Canopy Growth with a "sector perform" recommendation and $10 share target. The Globe's David Leeder writes in the Eye On Equities column that analysts on average target the shares at $9.13. Mr. Gomes says in a sector "deprived of trading liquidity and institutional engagement," Canopy Growth "delivers a differentiated proposition." Mr. Gomes notes that Canopy is the only company offering direct exposure to cannabis markets in Canada, the United States and Europe, along with a Nasdaq listing. He believes Canopy's valuation "already prices in reasonable growth expectations." Mr. Gomes says in a note: "A comprehensive transformation of Canopy's core business is driving margins in the right direction and reducing cash use, materially derisking the investment case for Canopy. Management has divested assets and transitioned to an asset-light model in Canada, resulting in a cost structure more commensurate with its addressable market and a keener focus on profitability. ... Over the long-term, we think Canopy will re-gain share in Canada as the market rationalizes.