Market Overview

Northland Downgrades Tilray After Huge Run

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Northland Downgrades Tilray After Huge Run

On Thursday, yet another analyst joined the growing chorus saying marijuana stock valuations are getting overheated. 

The Analyst

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. 

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

Latest Ratings for TLRY

DateFirmActionFromTo
Jan 2020Initiates Coverage OnNeutral
Nov 2019MaintainsNeutral
Nov 2019Initiates Coverage OnNeutral

View More Analyst Ratings for TLRY
View the Latest Analyst Ratings

Posted-In: 420 investorAnalyst Color Cannabis Short Sellers Downgrades Top Stories Markets Analyst Ratings Best of Benzinga

 

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