Aurora Cannabis Analyst Says Company Poised To Outperform Canadian Peers

Over the past six months, Aurora Cannabis Inc (NYSE:ACB) shares have fallen almost 70%. On Tuesday, Cantor Fitzgerald reiterated a bullish stance on the cannabis company and updated its estimates based on the company's recent bond conversion announcement. 

The Analyst

Pablo Zuanic reiterated an Overweight rating on Aurora Cannabis with a CA$5.85 ($4.40) price target. 

The Thesis

Cantor is updating its estimates for Aurora based on the announcement that CA$227 million of CA$230 million in convertible bonds due March 9, 2020 will convert at an average share price of CA$3.2837, resulting in the issuance of 69.1 million shares, Zuanic said in a Monday note. (See his track record here.) 

Consensus projections for lower growth for Aurora vs. Cronos Group Inc (NASDAQ:CRON) and Canopy Growth Corp. (NYSE:CGC) are misguided given that the company was No. 1 in Canada's recreational and medical markets from January to September; has a "promising" lineup of Cannabis 2.0 products; and is one of three licensed producers with export momentum, the analyst said. 

“We expect the sector to move up in the year ahead, and expect ACB to outperform other large Canadian LPs such as CGC, CRON and TLRY.”

Price Action

Aurora shares were down 4.56% at $2.40 at the time of publication Tuesday. 

Related Links:

Aurora Cannabis Promotes 2 Execs, Says 94% Of Holders Chose To Convert Debentures

Analysts Disappointed With Aurora's Q1, But Some Have Faith In Future Catalysts

Photo courtesy of Aurora.