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Wednesday, November 13, 2019 10:30:08 AM
Nina Zdinjak , Benzinga Staff Writer
Bank of America Merrill Lynch’s Christopher Carey maintained a Buy rating on Cronos Group with a $13 price objective.
(not sure why that is different than the prior post $15)
The Thesis
BofA's price objective for Cronos is based on 20x CY20e EV/sales, Carey said in a Tuesday note. (See his track record here.)
The cannabis company's third-quarter results were "OK, with CRON leveraging the B2B channel to offload some inventory and drive sales, balanced by the fact that B2B is not a sustainable driver of long-term results in Canada, in our view," the analyst said.
With 41 quarters of cash available, Cronos has the strongest balance sheet among the companies BofA covers, he said.
"CRON cash on hand is a significant % of its company value, much higher vs peers. Capital combined with a forward-thinking and strong partnerships (e.g. Altria) position Cronos to potentially be a long-term leader in cannabis."
Capital deployment for M&A would bring upside risk to BofA's price objective, while the downside risks are valuation that is ahead of traditional industries and competition — and a risk-averse market that can cause cannabis stocks to fall, Carey said.
A substantial amount of Cronos' third-quarter revenue came from B2B sales, implying that its adult use retail sales probably fell, the analyst said, adding that the company's results cannot be viewed as a read-through to the rest of the cannabis sector's earnings.
Price Action
https://www.benzinga.com/analyst-ratings/analyst-color/19/11/14786668/bofa-cronos-group-has-potential-to-be-long-term-cannabis-leader
Recent CRON News
- Cronos Group Inc. to Reconvene Virtual 2024 Annual Meeting of Shareholders • GlobeNewswire Inc. • 07/05/2024 08:30:00 PM
- Cronos Brand Spinach® Celebrates Summer with New Launches • GlobeNewswire Inc. • 06/27/2024 11:30:00 AM
- Cronos Group Inc. Announces Results of 2024 Annual Meeting of Shareholders • GlobeNewswire Inc. • 06/21/2024 08:30:00 PM
- Cronos Group Announces Expansion of GrowCo to Fuel Global Growth • GlobeNewswire Inc. • 06/20/2024 12:12:02 PM
- Cronos Group Inc. to Speak at Bernstein's 40th Annual Strategic Decisions Conference • GlobeNewswire Inc. • 05/29/2024 11:30:00 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/28/2024 09:32:59 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/28/2024 09:32:47 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/28/2024 09:02:27 PM
- Cronos Terminates Sale-Leaseback of Peace Naturals Campus • GlobeNewswire Inc. • 05/28/2024 08:45:00 PM
- Form SD - Specialized disclosure report • Edgar (US Regulatory) • 05/15/2024 09:02:32 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/14/2024 09:09:07 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/14/2024 09:06:06 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/14/2024 09:05:10 PM
- U.S. Index Futures Dip, Bank of England Holds Interest Rates at 5.25% • IH Market News • 05/09/2024 11:47:20 AM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 05/09/2024 11:32:35 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/09/2024 11:31:22 AM
- Cronos Group Reports 2024 First Quarter Results • GlobeNewswire Inc. • 05/09/2024 11:30:00 AM
- Cronos Enters United Kingdom Cannabis Market • GlobeNewswire Inc. • 05/07/2024 11:00:00 AM
- Cronos Group Inc. to Hold Virtual 2024 Annual Meeting of Shareholders • GlobeNewswire Inc. • 04/26/2024 08:45:00 PM
- Cronos Group Inc. to Hold 2024 First Quarter Earnings Conference Call on May 9, 2024 • GlobeNewswire Inc. • 04/25/2024 08:15:00 PM
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- Cronos Launches Lord Jones® Chocolate Fusions • GlobeNewswire Inc. • 03/25/2024 11:00:00 AM
- Cronos Group Inc. to Speak at the 36th Annual Roth Conference • GlobeNewswire Inc. • 03/12/2024 08:15:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/05/2024 10:24:53 PM
- Form 4/A - Statement of changes in beneficial ownership of securities: [Amend] • Edgar (US Regulatory) • 03/05/2024 10:21:59 PM
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