Negative Canopy Article on Barrons Analyst idiot, spouting off sending the sp down:
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Don’t Buy Canopy Growth Stock. The Marijuana Company Is About to Lose a Ton of Money, Analyst Says Canadian marijuana producer Canopy Growth has loads of cash and an early start, as prohibitions fall around the world. But at $28 per share, Canopy stock is expensive, said Oppenheimer analyst Rupesh Parikh, who expects the company to lose more than $500 million over the two year period that ends March 2021.
That’s why Parikh rated Canopy Growth stock (ticker: CGC) a market performer in a Wednesday note initiating coverage of the shares.
“[W]e are closely watching the company’s ability to navigate a difficult backdrop lately and improve profitability,” Parikh wrote. His note set no price target for Canopy stock, which was trading at $28.78 on Wednesday afternoon.
Canopy stock has shed half its value this year, as the company reported heavy losses on disappointing Canadian pot sales. Those results led to the July ouster of its founding chief executive Bruce Linton, with the support of the marijuana outfit’s 38% stockholder, Constellation Brands (STZ).
Even after the selloff, Canopy stock trades at a valuation premium to its peers, Parikh said. By his calculation, Canopy goes for seven-times its expected 2021 revenue. That’s double the industry average, Parikh said. By comparison, he estimated that the industry’s sales leader Aurora Cannabis (ACB) trades for less than five-times its 2021 revenue.
Canopy’s fortunes could improve if any of a half-dozen things go right, Parikh said. Those include the naming of a new CEO and the rollout of new cannabis products in Canada later this year—including beverages, edibles and vapes. But Parikh also listed 13 things that can go wrong. Those include weak overall sales of pot in Canada and a poor reception for Canopy’s new products.
Wall Street’s forecasts and Canopy management’s guidance strike Parikh as aggressive. “We would await a full reset before speculating on [Canopy’s] prospects,” he said."
Artcile Link: https://www.barrons.com/articles/canopy-growth-stock-marijuana-sales-51568836902?siteid=yhoof2&yptr=yahoo
Thanks to ace_666 for digging this up over on Reddit.