Could the marijuana leader’s stock be worth only $10? What happened Shares of Aurora Cannabis (NYSE:ACB) sank 6.6% on Friday after analysts at Jefferies downgraded the popular marijuana stock. So what Jefferies lowered its rating on Aurora’s stock from hold to underperform. The investment bank says the recent surge in Aurora’s share price is too much,…
Jefferies decreased its rating on Aurora’s stock from hold to underperform. The investment bank states the recent rise in Aurora’s share price is excessive, too fast.
” We think near-term sales and [gross margin] headwinds are not totally valued, while celebrating a hiatus on additional dilution is shortsighted,” Jefferies expert Owen Bennett said.
Bennett thinks Aurora will ultimately require to water down investors once again by offering more stock in order to fortify its dwindling cash reserves. In turn, he anticipates the stock to give up some of its gains in the coming quarters.
Aurora Cannabis gave back a few of its current stock cost gains on Friday, following cautionary remarks from Jefferies analyst Owen Bennett. Image source: Getty Images.
Bennett did raise his target price for Aurora’s shares from $8.57 to $10, in order to represent the cannabis producer’s recently revealed acquisition of Reliva, a popular retail cannabidiol (CBD) brand name in the U.S. However, he questioned the timing of the deal and whether Aurora will be able to completely support Reliva’s expansion.
” The CBD area is experiencing significant headwinds presently … and the [balance sheet] does not pay for investment behind the purchase,” Bennett stated.
Bennett’s new $10 target cost represents potential disadvantage of 37.5%for Aurora’s financiers, based upon the stock’s present price of $1601
position in any of the stocks mentionedDiscussed The Motley Fool has no position in any of the stocks pointed out.”>