Company News

BUZZ-Street View: Tilray profitability still a long way off


** Canadian pot producer Tilray Inc posted a bigger-than-expected quarterly loss on Tuesday, as it ramped up investments to boost production and warned of muted growth in the Canadian recreational marijuana market in H2

** Shares down 14.4% at $39.40, set for their worst day in seven months

** Drags other U.S.-listed cannabis stocks: Canopy Growth , Cronos Group, Aphria Inc, Hexo Corp down between 5% and 8%


** Cowen (“outperform”, PT: $150) raises revenue estimates but cuts profit est. on rising investments

** “While TLRY didn’t realize any sales from Portugal in Q2, the company looks well positioned to start supplying markets outside of Canada from Portugal in H2 2019”

** BMO Capital Markets (“market perform”, PT: $50) says a delay in the rollout of derivate products due to regulatory or logistical issues could further exacerbate the headwinds on industry margins and cash flows

** Eight Capital (“buy”, PT: $55) says international capacity continues to expand, but is concerned about uncertainty regarding regulations, that could move orders for vapes, edibles close to year-end or 2020

** Morningstar says achieving profitability appears to be years down the road, and co will have to pay higher prices for unprocessed products as it moves to purchase cannabis from other cultivators increasingly

** RBC Capital Markets (“sector perform”, PT: $45) says management commentary suggests profitability will take longer to attain; keeps focusing on the international revenue ramp in Q3/Q4 (Reporting By Arundhati Sarkar and Neha Malara in Bengaluru)