Canadian company Aurora Cannabis (TSX:ACB) (NYSE:ACB) is almost always in the news, usually because investors are either praising the company or scrutinizing it. And today, it looks like the market is doing both to ACB stock, sending it down nearly 2%.
Here's what's going on.
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In part because of its international reach and production profile, Vivien Azer, a Cowen analyst, believes Aurora Cannabis's cultivation footprint gives the company a competitive edge.
According to a July 2 article published by Yahoo Finance, ACB's cultivation footprint provides Aurora Cannabis "with the necessary infrastructure to weather early storms in adult use while continuing to grow higher-value revenues in the medical market." Of course, with this view on ACB stock, it's no surprise Azer also reiterated her Outperform rating on the cannabis stock. The analyst has a price target of $15.00.
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Further, the report said Azer believes Aurora Cannabis's "operational rigour" is impressive. Why? Because it has allowed the Edmonton-based company to reach positive EBITDA. Despite the possibility of Aurora Cannabis seeing restrictive regulatory roadblocks, Azer believes that “ACB should trade at a premium to the peer group given its near term path to profitability in conjunction with strong early stage execution within the nascent Canadian cannabis adult use market.”
And yet, despite today's optimism, ACB stock is falling on the market. According to Yahoo Finance, as of 12:13 PM EDT, ACB stock is trading at $10.07; this puts Aurora stock down 1.85%.
Takeaway
What do you think about Azer's views on the future of Aurora Cannabis? Is the company's cultivation footprint going to bring good things for ACB? Plus, is an Outperform rating a reasonable rating for ACB stock?
Let us know your thoughts in the comments below and don't forget to see where ACB stock ends the week.
Featured image: PixaBay
