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On Thursday, yet another analyst joined the growing chorus saying marijuana stock valuations are getting overheated.
The Analyst
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Northland Capital Markets analyst Mike Grondahl downgraded Tilray Inc (NASDAQ:TLRY) from Outperform to Market Perform and removed its $60 price target.
The Thesis
Grondahl said he still loves Tilray as a company and believes it will be a central player in a global cannabis boom.
With the stock up 242.2 percent in the past month, he said additional upside is likely limited.
“With the recent (massive) move in the stock, we believe the risk-reward is far more balanced at this time,” the analyst said.
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Grondahl isn’t the only one to express skepticism about the recent rally. New Cannabis Ventures founding partner and 420 Investor author Alan Brochstein joined Benzinga's PreMarket Prep show Wednesday and said traders are running wild with Tilray, Canopy Growth Corp (NASDAQ:CGC) and Cronos Group Inc (NASDAQ:CRON), the only three U.S.-listed cannabis stocks.
“There is a positive fundamental story going on, it’s just hard to tie the valuation into where we are right now,” Brochstein said.
Citron Research’s Andrew Left also told Benzinga on Thursday that companies like Tilray may soon take advantage of the opportunities that come along with an inflated share price and choose to raise capital via a secondary offering.
“They are taking advantage of a market that is giving them a premium that obviously they believe is unwarranted,” Left said.
Price Action
Tilray pared some of its recent gains on Thursday morning and was trading lower by nearly 11 percent at $80 at the time of publication.
Related Links:
Even Marijuana Bulls Are Becoming Skeptical Of US-Listed Cannabis Stock Prices
Cannabis Stocks Remain Hot, But Might Be Getting Overheated
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.