Aurora Cannabis Gets a Downgrade and Price Target Increase in the Same Day

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

ACB – Cowen downgraded Aurora Cannabis (ACB), Tilray (TLRY) and Sundial Growers (SNDL). As a result, shares of ACB closed down over 5%.

 

This week got off to a rocky start for the stock markets as indexes plunged yesterday.  To make matters worse for cannabis stocks, Cowen downgraded Aurora Cannabis (ACB - Get Rating), Tilray (TLRY - Get Rating) and Sundial Growers (SNDL). As a result, shares of ACB closed down over 5%. 

Vivien Azer at Cowen said the headwinds that have wreaked havoc on the cannabis sector are not going to subside any time soon. They include a shortage of retail stores, pricing pressures created by a still-thriving black market and oversupply issues that aren’t easing as expected. Azer said that cannabis 2.0, which is the next phase of legalization including edibles and other derivatives, is unlikely to be the boost that the market was hoping for.

Azer lowered her 2020 Canadian total addressable market (TAM) forecast by 32% to C$3.5 billion ($2.6 billion) in legal sales, including medical cannabis and taxes. She had already lowered her TAM forecast by 27% since January of 2017. Previously, Azer was one of the remaining bullish analysts covering ACB.

Azer wrote in a note to her clients today that, “While industry challenges around doors and high-quality flower supply are well understood, we now believe that the slower than expected rollout of cannabis 2.0 products will also prove as a headwind to revenues.”

In Cowen’s research, they found a severe shortage of edibles and a significant increase in value-based brands via their in-person channel, after checking about 20 stores. This suggests legal cannabis is still having a hard time competing with the black market’s cheaper prices. 

Cowen downgraded ACB to market perform, down from outperform.

However, there is still one Wall Street analyst who remains bullish on ACB. Pablo Zuanic of Cantor Fitzgerald reiterated his overweight rating on the stock.  He

said he is expecting a rerating of Candian licensed producers in the next year. Zuanic said recent moves taken by the company to shore up its balance sheet and protect margins were positives and the stock’s underperformance versus peers is overdone. 

Zuanic highlights that recreational sales in Canada are second only to those of Canopy Growth. Over the last five quarters, it is one of just five companies that have been able to maintain new recreational prices above $5.20 a gram. Zuanic even raised his 12-month price target on ACB stock to C$3.80 from C$3.75. 

(Disclosure: The author is long ACB)

 


ACB shares were trading at $1.50 per share on Tuesday afternoon, down $0.05 (-3.23%). Year-to-date, ACB has declined -30.56%, versus a -2.04% rise in the benchmark S&P 500 index during the same period.


About the Author: Aaron Missere


Aaron is an experienced investor who is also the CEO of Departures Capital. His primary focus is on the cannabis industry. He also hosts a weekly show on YouTube about marijuana stocks. Learn more about Aaron’s background, along with links to his most recent articles. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
ACBGet RatingGet RatingGet Rating
CGCGet RatingGet RatingGet Rating
GWPHGet RatingGet RatingGet Rating
CRONGet RatingGet RatingGet Rating
APHAGet RatingGet RatingGet Rating
TLRYGet RatingGet RatingGet Rating
CTSTGet RatingGet RatingGet Rating
MJGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Why Are Stocks Floating Higher?

Why are stocks breaking above 6,000 once again? When will they make news highs? And what is an investor to do now? Seasoned investor Steve Reitmeister shares his thoughts in this updated commentary.

How is the Stock Market Like a Helium Balloon?

Stocks have finally broke above 6,000 for the S&P 500 (SPY). The more important question is what comes next? Steve Reitmeister provides his answer in his latest market commentary.

Has the Bull Market Run Out of Steam?

It seems the S&P 500 (SPY) advance has stalled and cant crack above strong resistance at 6,000. Why is that happening? And what happens next? Read on for the answers...

Investors Remain “Cautiously Optimistic”

The S&P 500 (SPY) has made great advances since the lows of early April. Yet seem to be stuck under resistance at 6,000. What happens next depends on tariff talks. So let’s talk about the latest news on that front.

Bull Market Til Proven Otherwise

The phrase that paid for investors in 2025 was “Bull market til proven otherwise” Steve Reitmeister explains why in his latest market update and preview of top stock picks.

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