Canopy Growth Corp (CGC) PT Lowered to $15 at Piper Sandler Due to Competitive Pressure in Canada

Piper Sandler analyst Michael Lavery lowered the price target on Canopy Growth Corp (NASDAQ: CGC) to $15.00 (from $19.00) due to intense competition in the Canadian recreational market. A market the analyst now estimates to be down sequentially and year-over-year in F2Q22. Total F22E sales drop from ~C$690M to ~C$625M and F23E sales drops from ~C$890M to ~C$865M, with better momentum projected on its US CPG brands that could partially offset weakness in Canada.

The analyst reiterated a Neutral rating, stating "To reach Canopy's profitability target, it will need market-leading growth in its new products and require execution improvement, which was cited several times as a headwind in F1Q22. We believe that Canopy's F4Q22 profitability objectives will be difficult to achieve as current momentum is now likely down sequentially and Y-o-Y in F2Q22. We expect some acceleration in F2H22, but believe it will be extremely challenging to go from ~C$135M in F2Q22 to ~C$250M in F4Q22."

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