15 Apr 2021
Earlier this week, Organigram Holdings Inc. (OGI.TO) (OGI) recorded volatile price movements after reporting second quarter financial results that missed analysts’ revenue expectations.
When compared to the same quarter in 2020, the Canadian cannabis producer generated lower revenues and recorded a much larger net loss. CEO Greg Engel attributed the weaker-than-expected results to the COVID pandemic and expects the business to bounce back from this period.
Although Organigram bounced off its post-earnings lows, broker-dealers did not respond favorably to the numbers. Several banks lowered expectations for the Canadian cannabis producer and we highlighted the changes below:
Haywood Securities lowered its price target to $3.50 from $4.75 (CAD)
CIBC cut its rating to Sell from Hold and lowered its price target to $3.25 from $5 (CAD)
ATB Capital Markets lowered its price target to $3.75 from $4.20 (CAD)
Alliance Global Partners lowered its price target to $3.75 from $4 (CAD)
Canaccord Genuity rasied its price target to $3.50 from $2 (CAD)
We believe the relationship with British American Tobacco (BTI) played an important role in how Organigram is viewed by Wall Street. The company is one of the few Canadian cannabis companies to have a strategic relationship with big tobacco and we consider this to be an important differentiator for the business’ value proposition.
Organigram has been laser focused on the Canadian medical and recreational cannabis opportunity and does not have much exposure to strategic international markets. We expect the relationship with British American Tobacco to play an important role in how Organigram expands its reach and we will monitor how the story evolves over the next year.
The trend with broker-dealers issuing downgrades and slashing price targets on Canadian LPs is something that our readers need to be aware of. This comes as the banks are raising estimates on US multi-state operators (MSOs). This is a dynamic to be aware of and we will monitor how the trend continues as cannabis operators report quarterly financial results.
Earlier this week, Organigram Holdings Inc. (OGI.TO) (OGI) recorded volatile price movements after reporting second quarter financial results that missed analysts’ revenue expectations.
When compared to the same quarter in 2020, the Canadian cannabis producer generated lower revenues and recorded a much larger net loss. CEO Greg Engel attributed the weaker-than-expected results to the COVID pandemic and expects the business to bounce back from this period.
Although Organigram bounced off its post-earnings lows, broker-dealers did not respond favorably to the numbers. Several banks lowered expectations for the Canadian cannabis producer and we highlighted the changes below:
Haywood Securities lowered its price target to $3.50 from $4.75 (CAD)
CIBC cut its rating to Sell from Hold and lowered its price target to $3.25 from $5 (CAD)
ATB Capital Markets lowered its price target to $3.75 from $4.20 (CAD)
Alliance Global Partners lowered its price target to $3.75 from $4 (CAD)
Canaccord Genuity rasied its price target to $3.50 from $2 (CAD)
We believe the relationship with British American Tobacco (BTI) played an important role in how Organigram is viewed by Wall Street. The company is one of the few Canadian cannabis companies to have a strategic relationship with big tobacco and we consider this to be an important differentiator for the business’ value proposition.
Organigram has been laser focused on the Canadian medical and recreational cannabis opportunity and does not have much exposure to strategic international markets. We expect the relationship with British American Tobacco to play an important role in how Organigram expands its reach and we will monitor how the story evolves over the next year.
1ith broker-dealers issuing downgrades and slashing price targets on Canadian LPs is something that our readers need to be aware of. This comes as the banks are raising estimates on US multi-state operators (MSOs). This is a dynamic to be aware of and we will monitor how the trend continues as cannabis operators report quarterly financial results.
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