Canopy Growth, Corp (TSX: WEED) hit a new low on Monday as stocks plummeted in the Canadian market with investors growing apprehensive over rising interest rates aimed at taming inflation.
The leading Canadian licensed producer (LP) registered a painful 52-week low, dipping by 9.05% to C$4.22.
Monday’s low also marks a six-year record for the cannabis producer.
BMO Capital Markets analyst Tamy Chen downgraded Canopy Growth to a “sell” rating and the target price was dropped to C$2.50 following the company’s recent quarterly earnings report. The downgrade, according to the analyst, is due in part to how the company’s cost-cutting strategy is not likely to have a meaningful impact on its bottom line.
“Every LP likely struggles from time to time with suboptimal crops, yet we have not seen another company report as low as Canopy’s,” she said, alluding to Canopy Growth’s gross margin.
A few other brokerages have downgraded the cannabis producer to a “sell” rating. In a note published on Wednesday last week, Eight Capital trimmed the target price from C$7.00 to C$5.50. They’ve had the Canopy Growth’s rating on “sell” since May 24. On the same day, Canaccord Genuity Group slashed the target price from C$10.00 to C$6.00.
But Canopy Growth isn’t alone. Tilray (TSX: TLRY) also recorded an all-time low, trading at US$3.10 on Monday. Aurora Cannabis (TSX: ACB) meanwhile closed at C$0.02 away from its all-time low at C$1.58 on Monday.
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