CGC stock is trading lower on Friday as MKM's analyst Bill Kirk said that Canopy Growth (TSX:WEED) (NYSE:CGC) will not be profitable on a per-share basis by fiscal 2022.
The past few months have been quite difficult for the cannabis industry after the initial euphoria of 2018 when many stocks reached their lifetime highs. However, the past months have been especially tough on many companies, and Canopy Growth is certainly one of those. Canopy stock has performed poorly, in keeping with the wider market, and with its investor meeting on December 3 approaching, there must be a lot of things on the top of investors' minds.
Analyst's Note
Bill Kirk, an analyst at MKM Partners, has stated that Canopy Growth is not going to be profitable anytime soon.
According to Kirk, he does not see Canopy becoming profitable even by the time the financial year of 2022 ends. He added that the company’s cultivation-oriented business model is also going to be under pressure in the coming years, as more and more products are made available online. That being said, Kirk believes that Canopy’s superior research and development capabilities might give it a definite advantage over many of its peers.
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At the time of writing, CGC stock is down 1.65% at $18.50 USD.
Bank of America is Bullish
However, after being beaten down for a sustained period, the company got a bit of boost last week after CGC stock was given a ‘buy’ rating by Bank of America.
The bank believes that after the near completion of the earnings season and the inevitable decline in many of the stocks, Canopy Growth's stock may have bottomed out. It added that the stock is an attractive pick at the level during the time. After the upgrade, investors soon took note, and since then, the stock has rallied by as much as 33%.
It proved to be a major boost for one of the biggest cannabis companies in the world, and it remains to be seen if CGC stock can carry the steam into the next week. It is, however, important to point out that consensus analysts’ estimates with regards to the Canopy remain ‘hold’.
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