The Bank of Montreal reportedly downgraded its price target on The Green Organic Dutchman (TSX: TGOD) this evening following this mornings news that the firm is struggling to secure financing from financial institutions. The news follows an additional downgrade earlier today on the equity by that of Canaccord Genuity.
BMO reportedly reduced its rating to underperform in light of the recent developments of the company, while citing a price target of $0.70 on the organic issuer. The news was first broke of the downgrade by Mark Rendell of The Globe and Mail, who put out a tweet in relation to the downgrade.
Commenting on the rating, BMO stated, “Notwithstanding the 17% decline today, we believe there is further downside risk now that traditional credit financing sources have become unavailable. TGOD is trading at 5x our 2020 sales estimate, which we consider to be elevated given its worsening liquidity position and significant execution ramp ahead. In a worst case scenario, if the company is unable to secure external financing soon, there would be risk to the company’s going concern status.”
The new price target placed on the firm is based on a 3x multiple of Bank of Montreal’s 2020 sales estimates.
Canaccord Genuity also took the time today to downgrade its price target on The Green Organic Dutchman, dropping its target to that of $1.25 in light of the oncoming financial struggles at the firm. Canaccord was one of the first to begin the downgrade cycle for TGOD, placing a target of $2.75 on the firm in early September, causing significant uproar among investors.
The Green Organic Dutchman closed today’s session at $1.43, down 17.34% on the day.
Information for this briefing was found via Sedar and The Green Organic Dutchman. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.