This morning Aphria was downgraded to Underperform from Neutral by CIBC analyst John Zamparo lowering his price target for the shares to $6.50 from $12.
Zamparo cited concerns about “aggressive” estimates, potential asset impairment, a “leadership void and less robust supply contracts” for the downgrade.
He told investors in a research note Aphria likely captures a high-single-digit market share, and last month’s partnership with PAX Era was a “meaningful win,” the stock carries more risk than reward at current levels. The analyst believes consensus estimates need to come down to reflect slower industry growth than previously contemplated.
Aphria is already down 65% from it’s high back in September. Which isn’t unusual for cannabis stocks.
Aphria came under pressure last fall for egregious insider dealing on their Latin American transactions and Liberty Health Science acquisition. Which showed shocking photos of what Aphria purchased in Jamaica and CEO Vic Neufield purchasing founder stock in Liberty Health Science prior to having Aphria acquire the company at a much higher multiple.
This of course happening on a rough week for cannabis stocks.
Information for this briefing was found via Sedar, TheFly and Twitter. The author is short Aprhia via Puts and has no 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.
SmallCapSteve started blogging in the Winter of 2009. During that time, he was able to spot many take over candidates and pick a variety of stocks that generated returns in excess of 200%. Today he consults with microcap companies helping them with capital markets strategy and focuses on industries including cannabis, tech, and junior mining.