Aphria Analyst Trims Price Target On Lower Sales Projections Ahead Of Q2 Report

An Aphria Inc. APHA analyst maintained their bullish stance on the stock Monday and trimmed their price target ahead of the cannabis company's Jan. 14 second-quarter report.

The Aphria Analyst

Cantor Fitzgerald’s Pablo Zuanic maintained an Overweight on Aphria with a price target lowered from CA$10.40 ($8.02) to CA$9.90 ($7.63). 

The Aphria Thesis

Aphria should report stable second-quarter sales and EBITDA trends on Jan. 14, “which in the context of the rest of the rest of the group, should be seen as good news,” Zuanic said in a Monday note. (See his track record here.) 

Aphria hasn’t seen damage from the price compression of product return provisions like other companies in the industry, and it should continue to outperform in operating metrics, the analyst said. 

Cantor is lowering its price target due to lower sales estimates based on Cannabis 2.0 launch issues such as vape bans.

Aphria is not expected to trim its FY20 sales guidance this early, he said. 

“We have slightly lowered our Nov qtr rec sales for APHA to $17Mn from $18Mn to factor in the notion of no QoQ growth. We continue to assume flat med sales at $8.8Mn, and no international sales (for now).”

Aphria Price Action 

Aphria shares were down 4.44% at $4.74 at the time of publication Monday. 

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