2 Cannabis Stocks to Avoid After Stifel Cuts Their Price Targets

: ACB | Aurora Cannabis Inc. News, Ratings, and Charts

ACB – Surging inflation and the Fed’s hawkish monetary policy stance could keep the stock market under pressure in the near term. Amid the uncertainties surrounding the economy and the stock market, Stifel analysts are maintaining a negative outlook on the cannabis industry and have cut their price targets for the stocks of fundamentally weak companies Aurora Cannabis (ACB) and Canopy Growth (CGC). Read on.

April’s consumer price index increased 8.3% year-over-year, beating the 8.1% estimate. Though the rate is lower than 8.5% in the prior month, the higher-than-expected inflation is expected to push the Fed to tighten its monetary policy further. This raises concerns that the economy may slip into recession.

The uncertainties surrounding the economy and the stock market have dampened investor sentiment. Concerns over the broader equity market and persistent issues in the cannabis sector have driven a significant price decline by stocks in this space. Investors’ tepid interest in cannabis stocks is evident in the Global X Cannabis ETF’s (POTX) 30.3% decline over the past month. Earlier this month, Stifel analyst W. Andrew Carter confirmed his firm’s negative bias regarding the cannabis market.

Based on their weak growth prospects, Stifel analysts have cut their price targets for Aurora Cannabis Inc. (ACB) and Canopy Growth Corporation (CGC). Also, our proprietary rating system has rated these stocks as Strong Sell. So, these stocks could witness further price declines in the near term.

Aurora Cannabis Inc. (ACB)

Headquartered in Edmonton, Canada, ACB produces, distributes, and sells cannabis and cannabis derivative products in Canada and internationally. It also assists facility engineering and design, cannabis breeding, research, production, derivatives, product development, wholesale, and retail distribution activities. 

On May 2, 2022, Stifel Analysts cut ACB’s price target to CAD3.00 from CAD3.50.

ACB’s total net revenue has decreased 10.5% year-over-year to CAD60.59 million ($46.55 million) for its fiscal 2022 quarter, ended Dec.31, 2021. Its gross profit came in at CAD5.58 million ($4.29 million), down 54.3% year-over-year. Also, its total assets were  CAD2.49 billion ($1.91 billion) for the period ended Dec.31, 2021, compared to CAD2.60 billion ($2 billion) for the period ended June 30, 2021.

In terms of forward EV/S, ACB’s 3.58x is higher than the 3.43x industry average.

ACB’s revenue is expected to decline 5.7% to $181.78 million in its fiscal 2022. It missed EPS estimates in two of the four trailing quarters. And over the past six months, ACB has declined  69.8% in price to close yesterday’s trading session at $2.29.

ACB’s POWR Ratings reflect its poor prospects. It has an overall F rating, which equates to a Strong Sell in our POWR Ratings system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.

The stock has an F grade for Momentum and Sentiment and a D grade for Value, Stability, and Quality. Click here to access the additional POWR Ratings for ACB (Growth). ACB is ranked #166 of 167 stocks in the F-rated Medical – Pharmaceuticals industry.

Click here to checkout our Healthcare Sector Report for 2022

Canopy Growth Corporation (CGC)

Headquartered in Smiths Falls, Canada, CGC produces, distributes, and sells cannabis and hemp-based products for recreational and medical purposes, primarily in Canada, the United States, and Germany. It operates through two segments–Global Cannabis and Other Consumer Products. 

On May 2, 2022, Stifel Analysts cut CGC’s price target to CAD6 from CAD7.50.

CGC’s revenue has decreased 8.8% year-over-year to CAD155.02 million ($118.93 million) for the third quarter, ended Dec. 31, 2021. Its cash and cash equivalents came in at CAD615.15 million ($471.91 million) for the period ended Dec. 31, 2021, compared to CAD1.15 billion ($885.79 million) for the period ended March 31, 2021. Furthermore, its total assets came in at CAD6.31 billion ($4.84 billion), compared to CAD6.82 billion ($5.23 billion).

In terms of forward EV/S, CGC’s 5.63x is higher than the 3.43x industry average. And  its 4.64x forward P/S is also higher than the 4.02x industry average.

CGC’s EPS is estimated to decrease 265.8% in 2023. Its EPS is estimated to remain negative in 2023. Over the past six months, the stock has declined  63.2% in price to close yesterday’s session at $4.98.

CGC has an overall F grade, which equates to a Strong Sell in our POWR Ratings system. It has an F grade for Value, Momentum, and Sentiment and a D grade for Stability and Quality. Click here to access all the CGC ratings (Growth). CGC is ranked #162 in the Medical – Pharmaceuticals  industry.

Want More Great Investing Ideas?

3 Stocks to DOUBLE This Year


ACB shares were trading at $2.43 per share on Thursday afternoon, up $0.14 (+6.11%). Year-to-date, ACB has declined -55.08%, versus a -17.48% rise in the benchmark S&P 500 index during the same period.


About the Author: Riddhima Chakraborty


Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
ACBGet RatingGet RatingGet Rating
CGCGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Does Trump Change Stock Market Outlook?

The rally of the S&P 500 (SPY) after the election gives a sense that investors are happy that Trump was elected. But perhaps there is more to this story than meets the eye. That’s why Steve Reitmeister shares his updated market outlook taking into account the pros and cons of Trumps proposed new policies. This comes with a preview of his top 11 stocks to buy now.

3 Streaming Stocks Benefiting from Cord-Cutting Trends

As streaming continues to dominate the digital entertainment landscape, the global streaming market presents a lucrative investment opportunity. So, it could be ideal to invest in fundamentally solid streaming stocks Netflix (NFLX), Walt Disney (DIS), and Roku (ROKU). Read further...

3 Gold Stocks to Buy as Safe-Haven Demand Grows

Gold is a stable investment now due to its role as a safe-haven asset during economic uncertainty, rising demand, industrial use, and growth, bolstered by central bank purchases and interest rate cuts. Therefore, investors should consider investing in top gold stocks such as Newmont (NEM), Barrick Gold (GOLD), and Agnico Eagle Mines (AEM). Read more...

3 AI Stocks Transforming Industries and Driving Future Growth

With rapid digitalization, rapid adoption, and development, as well as surging demand, the AI market is on the rise. Amid this backdrop, investors could buy fundamentally solid AI stocks NVIDIA Corporation (NVDA), Microsoft (MSFT), and Meta Platforms (META) poised for substantial gains. Continue reading...

Updated Stock Market Expectations

The S&P 500 (SPY) has already reached an impressive goal of hitting 6,000. Yet you can see how much shares are struggling now up against this resistance. Steve Reitmeister shares his views on what comes next for the market and his top 10 stocks to stay on the right side of the action.

Read More Stories

More Aurora Cannabis Inc. (ACB) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All ACB News