HEXO Stock Drops Following Analyst Downgrade
HEXO (NYSE: HEXO) was hit by an analyst downgrade on Friday. In a research note, investment bank Jefferies Financial Group shifted its recommendation on the stock to underperform from the previous hold. It also cut its price target on the shares nearly in half, from 1.90 Canadian dollars ($1.43) to CA$1 ($0.75).
In the note, analyst Owen Bennett opines that sales forecasts for marijuana and cannabis products in Canada are too optimistic. He also feels that the profitability of Cannabis 2.0 products -- the derivatives that were sanctioned in the second wave of Canadian recreational-use legalization last year -- could be "nonexistent," at least during the early stages of their rollout.
Image source: Getty Images
Source Fool.com
