Canopy Growth has seen trouble but the stock for the Canadian company has undergone a strong turnaround in recent weeks. Recently the stock had reached a new 52-week low result. However, since then the share has been on a recovery course and is showing better results. Canopy Growth has suffered from “industry-wide challenges” over the past year and has seen these issues affect the stock.
Canopy Growth’s stock has recovered significantly over the past few weeks, even temporarily hitting the important $22 (CA$30) mark. Now the stock is also receiving support from analysts. The analysts of BMO have upgraded Canopy Growth’s stock from “Market Perform” to “Outperform.”
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Investors still show interest in Canopy Growth’s stock
The price target was even raised from $18 (CA$25) to $30 (CA$40.) This represents a price potential of around 40% compared to the closing price in Toronto. The share can easily increase before the stock exchange reopens.
In the meantime, slight optimism has returned to the market. Analyst Vivien Azer of the investment house Cowen & Co, now sees the sometimes feared scenario of a strict crackdown on cannabis by the U.S. federal government as becoming increasingly unlikely.
People’s approval of legalization has never been higher, so the Trump government would probably not be doing itself any favours by taking a hard line against cannabis. According to a CBS survey, around 65% of adults in the U.S. in 2019 were in favor of legal cannabis which equals a record high.
Investors who followed the recent “Buy” recommendation on Canopy Growth’s stock are letting the profits run. Things get exciting on Feb. 14, when Canopy Growth will publish its figures for the third quarter of the fiscal year 2020. However, the sector remains highly speculative and is therefore only suitable for very risk-averse investors.
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First published in Der Aktionär, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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