Shares in Aurora Cannabis Inc. suffered from their worst trading record in more than five years Friday, following a revenue report that included disappointing numbers and plans to cut spending, sent analysts running to cut their Canadian marijuana maker's forecasts .
revenues fell 24% in succession in fiscal first quarter, and the second largest public weed company on sale canceled or delayed plans for several additional plant extensions and converted $ 1
Analysts said investors had reason to anger and mistrust after the report, and should think about whether it means it's time to step away from the cannabis industry altogether.
"If Aurora is less keen on using capital for this industry, we believe investors should also be reluctant to invest capital in the industry," wrote MKM Partners analyst Bill Kirk, who has a seller rating and a $ 3 price target on
Jeffries analyst Owen Bennett noted that dilution from bond conversion can swing investor sentiment even more, and believes a write-down for goodwill impairment from the acquisition of MedReleaf may be on the way. attitude, investor confidence could be a real question after Aurora's optimistic statement before Thursday's disappointment.
Now EBITDA (and cash) seems unlikely this year, it would be fair for investors not to believe them, "the analyst wrote , which has a buy rating and $ 7 price target on the stock.
Nine analysts cut their price target on the stock, according to FactSet, while selling and entering Stifel analyst W. Andrew Carter established the lowest price target tracked by FactSet when he reduced his to $ 2.80 from $ 3.50, while maintaining a sales rating.
"The company outlined a robust plan to strengthen the balance sheet, but even with $ 500 million in established funding resources available, we believe the company's precarious financial position leaves little room for error," Carter wrote. "We believe the challenges in the current environment in the category provide little support for cannabis companies that rely on capital markets."
However, not all analysts were angry about Aurora's announcements. The only rating change came from Cantor Fitzgerald analyst Pablo Zuanic, who upgraded the stock to overweight from neutral while raising his price target to $ 5.85 from $ 5.10.
When Zuanic explained that move, four reasons stated, "We do not expect a worse quarter for the group," Aurora is in better shape than other cannabis companies, and full-year results show a strong understanding of the market and the features announced on Thursday afternoon, was "more decisive action" than rivals do.
"Kudos for the timeliness and depth of the reveal (best in class among the larger LPs," Zuanic wrote. "We think this should account for something."
Cowen analyst Vivien Azer titled her income note, "We now has cash, that's a good thing, "even as she set her price target to $ 6 from $ 8.
" With the Canadian cannabis sector under-whelming across the board, for some reason, ACB delivered it perhaps the most critical element: more cash, "wrote Azer, who maintained a better performance appraisal." In our view, management takes a sound approach to match supply capacity with demand, and thus slows the pace Given the low cost production, ACB seems willing to capitalize on its benefits. "
Seaport Global analyst Brett M. Hundley said his neutral rating would be assessed, but said that at least Aurora was trying to take control of
" These actions are expensive, but they keep Aurora in control of their own destiny, "Hundley wrote.
Following Friday's changes, 8 of 17 analysts were tracked by the FactSet brand Aurora which corresponds to a purchase, while seven call it a hold and two rank the stock a seller. The average price target was $ 5.69, according to FactSet.