FYI Globe says Bottomley maintains his "hold" on Hexo
2020-06-15 07:52 ET - In the News
The Globe and Mail reports in its Saturday, June 13, edition that Canaccord Genuity analyst Matt Bottomley has reiterated his "hold" on Hexo. The Globe's David Leeder writes that Mr. Bottomley increased his share target to $1.50 from $1.30, which is two cents below the consensus. On Thursday, Hexo posted revenue of $22.1-million, up 30 per cent from the previous quarter and ahead of Mr. Bottomley's $20.2-million projection. Mr. Bottomley says in a note: "The driving factors behind the sequential top-line growth included: (1) growth in its value-brand Original Stash; and (2) the introduction of newly launched products, including hash and extract drops. As a result, the company saw its adult-use volumes increase by 42 per cent quarter-over-quarter, which outpaced revenues due to a decline in the company's average adult-use net pricing, which came in at $2.25 per gram versus $2.47 in FQ2. Further, the company continues to hold a more than 30-per-cent market share in Quebec, and as can be inferred from its pricing vs. volume growth above, Hexo continues to place importance on securing/increasing market share throughout Canada as opposed to maximizing average pricing in the near term."