Market Overview

MKM Lowers Aurora Price Target On Softening Cannabis Industry Forecast

MKM Lowers Aurora Price Target On Softening Cannabis Industry Forecast

Aurora Cannabis Inc (NYSE: ACB) stock is down 30.03% on a year-to-date basis, and 35.1% over the last 30 days.

The Analyst

MKM Partners analyst Bill Kirk maintained a Sell on Aurora and lowered the price target from CA$5 ($3.78) to CA$3.50 ($2.65). 

The Thesis

MKM has three reasons for cutting the price target, Kirk said in a Monday note: 

  • Industry pricing has fallen. 
  • The illicit cannabis price gap has widened. 
  • Aurora’s new store openings in Quebec and Ontario are not meeting expectations.

Click here for more information about the upcoming Benzinga Cannabis Capital Conference Oct. 22-23 in Chicago.

The cannabis company warned during its Sept. 12 earnings call that July and August were slower, and given HEXO Corp (NYSE: HEXO)'s commentary and pace of new stores, MKM has concluded it's unlikely September and early October were any better, the analyst said. 

MKM lowered its first-quarter 2020 net sales estimate from CA$117 million to CA$98 million and cut the adjusted EBITDA estimate from CA$14 million to CA$21 million.

"We believe there is still some estimate optimism to shake and trim from the industry," Kirk said. 

Price Action

Aurora shares were down 6.52% at $3.44 at the time of publication Monday. 

Don’t miss out on the top cannabis stories of the day. Click here to sign up for our daily insider newsletter.

Photo courtesy of Aurora. 

Latest Ratings for ACB

Jan 2020DowngradesNeutralUnderweight
Jan 2020DowngradesBuyNeutral
Dec 2019MaintainsSell

View More Analyst Ratings for ACB
View the Latest Analyst Ratings

Posted-In: Bill Kirk MKM PartnersAnalyst Color Cannabis Price Target Reiteration Markets Analyst Ratings Best of Benzinga


Related Articles (ACB + HEXO)

View Comments and Join the Discussion!

Cannabis Movers

Sign up for our secret cannabis newsletter!
Never miss out on the breaking news in the Cannabis Industry!