The U.S. Food and Drug Administration recently posted a new message on its website indicating it is taking an open-minded but scientific approach to researching the potential benefits and dangers associated with marijuana and cannabis-related products. Cannabis investors and enthusiasts are patiently awaiting potential U.S. legalization. Several popular cannabis stocks have been top performers in the market in the past year. The cannabis business is expanding rapidly and the potential total addressable market is massive. However, some analysts are starting to get concerned about sky-high valuations. Here are eight cannabis stocks that have Wall Street buzzing.
Tilray (ticker: TLRY)
Shares of Canadian cannabis producer Tilray are down 37% so far in 2019. Oppenheimer analyst Rupesh Parikh says Tilray is a leader in the global cannabis space and aims to target both the consumer and medical markets. Tilray has secured key partnerships with companies like Sandoz, Shoppers Drug Mart, Pharmasave Drugs and Anheuser Busch Inbev (BUD). Unfortunately, given challenges in supplying the Canadian market and Tilray’s valuation relative to its cannabis peers, Parikh says there’s little near-term upside for Tilray shares even after the sell-off. Oppenheimer has a “perform” rating for TLRY stock.
Aurora Cannabis (ACB)
Aurora Cannabis is the second-largest Canadian cannabis producer. Stifel analyst W. Andrew Carter is forecasting rapid revenue growth from 168 million Canadian dollars ($128 million) in the past 12 months to CA$960 million in fiscal 2021. However, Carter says Aurora is at a disadvantage to other top Canadian producers in that it has not secured an international consumer or pharmaceutical company partnership. He also says Aurora may be focusing too much on margins and not enough on investing in business growth. Stifel has a “hold” rating and CA$10 price target for ACB stock.