Stifel Cautious On Aurora Cannabis Given 'Lack Of A Definitive Strategy' In US


20-Year Pro Trader Reveals His "MoneyLine"

Ditch your indicators and use the "MoneyLine". A simple line tells you when to buy and sell without the guesswork. It’s a line on a chart that’s helped Nic Chahine win 83% of his options buys. Here's how he does it.


Cannabis stocks are getting more and more attention from Wall Street these days, and Aurora Cannabis Inc (NYSE:ACB) received its first coverage from Stifel on Thursday.

The Analyst

Stifel analyst W. Andrew Carter initiated coverage of Aurora with a Hold rating and a C$10 ($7.47) price target.

The Thesis

Despite impressive growth numbers projected in the next several years, Carter said Aurora’s international medical-use growth opportunities are limited outside of Canada and Germany.

“We are cautious on Aurora in the near-term given the company's reliance on the capital markets to execute upon its near-term business plans, the lack of a definitive strategy for entering the U.S. market, and we believe the slower development of the global medical opportunity will yield downside versus consensus estimates,” he wrote in a note.

Need more cannabis news? Check out all of our coverage here.

For now, Carter said Aurora has an enviable position as the No. 2 Canadian cannabis producer behind top Stifel pick Canopy Growth Corp (NYSE:CGC). He isn't convinced Aurora management fully appreciates the level of investment that will be required to defend that position as the market grows.

Aurora has also yet to secure partnerships with a global consumer or pharmaceutical company. However, the addition of investor Nelson Peltz as a strategic advisor should help remedy the situation, according to Carter.

Carter said Aurora’s valuation has upside only if it can maintain its Canadian market leadership position and its industry-leading margins over time. The company will also need to demonstrate it can be profitable.

Price Action

Aurora shares traded lower by 3 percent to $7.48 at time of publication Thursday.

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Photo courtesy of Aurora Cannabis.


20-Year Pro Trader Reveals His "MoneyLine"

Ditch your indicators and use the "MoneyLine". A simple line tells you when to buy and sell without the guesswork. It’s a line on a chart that’s helped Nic Chahine win 83% of his options buys. Here's how he does it.


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Posted In: Analyst ColorCannabisPrice TargetInitiationMarketsAnalyst RatingsNelson PeltzStifelW. Andrew Carter