Cannabis Stocks Plunge Following Analyst Warning
Marijuana stocks could face steep declines, according to analysts at the Canadian Imperial Bank of Commerce.
CIBC analyst John Zamparo believes sales projections for the cannabis industry are "incredibly aggressive." Zamparo predicts that cannabis producer sales will grow to $2.2 billion in 2020 and $3.3 billion in 2021. The average analyst estimate is for $6.5 billion and $7.5 billion, respectively, according to BNN Bloomberg.
Zamparo also thinks that consensus earnings estimates for marijuana accompanies are too high. He forecasts cannabis producers will generate $550 million in earnings before interest, tax, depreciation, and amortization (EBITDA) in 2020 and $975 million in 2021. Analysts on average expect these companies to produce EBITDA of $900 million and $1.6 billion, respectively.
Source Fool.com
