Hopeless Analysts still following this? I guess they'll follow it right to the miserable end.
>>>Raymond James has downgraded the Canadian Licensed Producer Auxly Cannabis Group (OTCQX:CBWTF) to Market Perform from Outperform ahead of its Q2 2022 financials next week, citing the company’s recent market share losses and weak margins.
Per the channel checks, Auxly (OTCQX:CBWTF) continued to cede market share in the Canadian adult-use market, the analysts Rahul Sarugaser and Michael W. Freeman argued.
Auxly’s (OTCQX:CBWTF) “tapering or plateauing market share in each of its categories appear to be the driver of what we estimate will be relatively light 2Q22 Rev.,” the analysts added, lowering the price target on the stock to C$ 0.10 from C$ 0.40 per share.
Citing early data for July, the duo warns that the company will report another disappointing quarter with flat sales or modest growth in Q3 2022.
The analysts keep a close eye on Auxly’s (OTCQX:CBWTF) gross margins which only improved to 16% in Q1 2022 from 15% in Q4 2021. With topline unlikely to quickly improve this quarter, COGS will be a key factor as the company aims to generate positive EBITDA in 2H 2022, the analysts added.