CGC stock kicked off Monday in the red, currently down nearly 5%, likely due to Canopy Growth (TSX:WEED) (NYSE:CGC) getting downgraded last week.
Here's everything we know.
CGC Stock Gets Downgraded: Still Feeling the Effects
On Friday, September 27, Bank of America said it's downgraded Canopy Growth from a "buy" rating to a "neutral" rating. Additionally, Bank of America, a North Carolina-based investment banking company, lowered the CGC stock price target to $27. For perspective, the price target was previously $46.
After the Canopy Growth downgrade, CGC stock fell nearly 4%. On Monday, after investors had the weekend to think about what this means for the company, CGC stock opened the week in the red; it is trading at $22.77 as of 12:22 PM EDT on the New York Stock Exchange, which puts CGC stock down 4.45%.
According to Bank of America, the Canadian cannabis sector has some troubles approaching, with an analyst at the company expecting the growth of the industry to slow down in the second half of the year. Recent concerns over vaping may play a part in this. Analyst Christoper Carey also expects Canopy Growth to see a similar slowdown; this is one of the reasons for the CGC stock downgrade.
Not all analysts are pessimistic about the future of Canopy Growth, however. Additional analysts covering CGC stock came out with their suggestions last week; three out of 21 gave the cannabis stock a "strong-buy" rating, while nine rated it as a "buy." The market seems divided when it comes to Canopy Growth, and perhaps that has to do with CGC stock being under pressure this year, ever since it reported its fiscal 2020 first-quarter results. And yet, as the company prepares for the second phase of legalization in Canada, things may turn around for CGC stock. Or not, considering it's planning on selling vapes in Canadian markets come wintertime, and we all know the stigma surrounding vapes at the moment.
What do you think the future holds for Canopy Growth? Let us know your thoughts in the comments below.
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