Two of today's marijuana premarket movers are also two of the biggest names in cannabis: Canopy Growth Corp (TSX:WEED) (NYSE:CGC) and Aurora Cannabis (TSX:ACB) (NYSE:ACB).
With market caps of $14.8 and $12.4 billion USD respectively, both companies are heading the cannabis movement across the globe. Let's check in on some of their latest news and what has stock moving before the markets open.
Marijuana Premarket Movers: Canopy Growth
At a Q4 conference call on Thursday, Constellation Brands (NYSE:STZ) CEO Bill Newlands said that Canopy could make more than $1 billion in revenue by the end of the fiscal year.
CGC stock didn't respond much to his comment, suggesting investors don't buy it. A marijuana premarket mover today, the company is now trading in the red after the weekend; it's currently trading for $43.24 USD on the NYSE.
Newlands reiterated this estimation in a conversation with CNBC, saying the following:
"If you look at Canada alone, Canada is on a run rate of $5 [billion] to $6 billion in sales, and Canopy is the leading player in that market [...] Then you add in new form factors later this year in things like beverage and other edibles, we think the sky’s the limit."
Is he simply touting his own company? Or is this an actual metric investors should heed? Well, the consensus revenue for next year is estimated at $828 million, so Newlands evaluation, by comparison, is grossly overvalued.
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However, if he is correct, then CGC stock should see upside in response.
But some analysts remain skeptical:
"There's a huge opportunity here. But there's also a huge valuation. Even the $1 billion target suggests a 10x forward price to revenue multiple. Canopy Growth still is a few years from being profitable."
Constellation Brands signed an agreement with Canopy Growth in 2018, for 38% of the cannabis company. The pair will develop cannabis-infused beverages for the edibles market kicking off later this year.
Marijuana PreMarket Movers: Aurora Cannabis
Aurora Cannabis is currently a leading premarket mover, up 2.57% and selling for $9.17 USD on the NYSE.
The company is reportedly only one of three companies allowed to "cultivate and distribute medical cannabis in Germany." This news means big business for the company, as it will supply at least 4,000 kilograms over a four-year period to the German government. This product will then be sent to wholesale distributors of German pharmacies.
Importantly, Germany has a massive population of over 82 million people. So the market potential for Aurora here is huge.
Further, the company "received the highest ranking out of all 79 concepts submitted to the Federal Institute for Drugs and Medical Devices." Receiving the highest ranking "reinforces the validity of the company's strategy, expertise, efficiency and productivity," according to Seeking Alpha analyst Gary Bourgeault.
As industry leaders, these two marijuana premarket movers are always on investors' radars. Are these your cannabis industry leaders?
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Featured Image: DepositPhotos © leungchopan
