Cannabis company Canopy Growth got a rating downgrade from Jefferies on valuation.
Analysts at Jefferies lowered their rating on the company’s shares to underperform from hold. Their price target is $23.03.
Analyst Owen Bennett argued that while bulls will suggest that Canopy's multiple is deserved given possible near-term U.S. entry, it is still “too expensive” even though its U.S. optionality is the best among Canadian names.
The firm indicated that Canopy’s option to acquire U.S. multistate operator Acreage Holdings will likely be bolstered in the event of a change in U.S. federal cannabis laws. But for now both Canopy and Acreage are unprofitable, noted Bennett. According to the analyst, the fundamental outlook for other U.S. companies is "far superior".