Is it a good time to buy the dip on Aphria (NASDAQ :), (TSX 🙂 stock?
The Canadian Imperial Bank of Commerce thinks so.
That was the implied message from one of Canada's top six banks last week when it upgraded the Canadian pot maker to "outperform" without changing its price target of C $ 7.50 ($ 5.68) .
The rationale was simple: according to the bank's equity research department, without & # 39; fundamental change & # 39; in its contention about the cannabis producer, the fall in Aphria's stock price created after the disclosure of the latest CIBC sees as a 25% higher than the price target.
The bank's analysts pointed to Aphria & # 39; s continued market share growth and improved capital allocations to bolster its view of the stock.
Shares of Aphria reached a 2020 high of US $ 6.13 (C $ 8.02) on July 28, the day before the company announced its fourth quarter earnings. They fell to US $ 4.85 (C $ 6.52) the next day and lost nearly 21%. The sell-off was driven by an adjusted net loss of CA $ 0.14 (US $ 0.11) per share for the quarter, more than three times what analysts estimated.
Analysts expected the vertically integrated marijuana grower to incur a loss that would translate to about $ 0.04 per share.
Looking on the bright side, Aphria recorded an 18.4% year-over-year increase in its quarterly revenues to C $ 152.2 million (US $ 115.09 million). It was also slightly more compared to previous quarter revenues of C $ 144.4 million (US $ 109.19). Fourth quarter sales included cannabis net sales of $ 53.1 million, an 81% year-over-year increase. Likewise, Aphria's fiscal year 2020 sales saw an impressive increase of 129% to C $ 542.2 million.
Aphria shares closed trading at $ 4.48 last week, and rose slightly yesterday to close about 1.5% on the day at $ 4.55.
In the same note to investors, CIBC also lowered its price targets for two other companies in the cannabis industry: Aurora Cannabis (NYSE :), (TSX 🙂 and HEXO (NYSE :), (TSX :).
For Aurora, CIBC wrote, “Our F2021 forecast is down 8%, while our F2022 forecast is down 10%. For HEXO, our sales estimates in F2021 and F2022 decreased by 8% and 14% respectively. "
Curaleaf Keeps Climbing
Investors looking for a cannabis stock that is making some and steady climb, you may want to see Curaleaf Holdings (OTC 🙂 , (CSE 🙂 This US-based multi-state cannabis grower has seen its stock increase over the past six months and posted strong earnings results earlier this month, as shown by sales figures higher than last year.
The company posted second quarter total sales of $ 117.48 million, 22% more than the previous quarter and 142% more than the same period in 2019. Adjusted earnings before interest, taxes, depreciation and amortization were $ 27.994 million, a whopping 534% higher than the previous year.
The grower also expands, once operating in 17 states, now CURLF is present in 23 states in the US for both the medical and recreational markets.
Shares of Curaleaf peaked at US $ 9,555 on August 17, the day the last profit was announced, and have fallen slightly since then. Shares closed at US $ 8.36 yesterday, up more than 216% since the COVID-19 lockdowns began in mid-March. Curaleaf is up just over 23% in the past year.
