Street View: Tilray profitability still a long way off

Canopy Finance

14/08/2019 17:44

(Updates)
    ** Canadian pot producer Tilray Inc  TLRY.O  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  urn:newsml:reuters.com:*:nL4N25948A
    ** Shares down 14.4% at $39.40, set for their worst day in
seven months 
    ** Drags other U.S.-listed cannabis stocks: Canopy Growth
 CGC.N , Cronos Group  CRON.O , Aphria Inc  APHA.N , Hexo Corp
 HEXO.N  down between 5% and 8%
    
    REGULATORY UNCERTAINTY
    ** 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)
 ((Reuters Messaging: arundhati.sarkar@.thomsonreuters.com))