UPDATE: Stifel Downgrades GrowGeneration (GRWG) to Hold

(Updated - November 12, 2021 4:34 AM EST)

Stifel analyst W. Andrew Carter downgraded GrowGeneration (NASDAQ: GRWG) from Buy to Hold with a price target of $24.00 (from $41.00).

The analyst comments "Following 3Q21 results, we are downgrading the shares of GrowGeneration from Buy to Hold while establishing a $24 target price. We remain confident in the company’s longterm growth prospects, with GrowGeneration positioned to profitably capitalize on cannabis category growth through its hydroponics category leadership position. But we underestimated the headwinds from more challenging category dynamics, onerous input cost inflation, and the strain on the company’s existing infrastructure. FY22 plans include heavy reinvestment behind the supply chain, systems, and inventory with aggressive greenfield expansion targeting 15 to 20 new stores. We believe the ability to heavily reinvest while enduring softer sales growth is underappreciated, with these investments likely enhancing the company’s ability to profitably and efficiently capture hydroponics category growth. But, we outline a weaker near-term fundamental performance, which we believe will obscure the platform’s long-term advantages, impeding sustained investor enthusiasm and leaving the shares range bound."

For an analyst ratings summary and ratings history on GrowGeneration click here. For more ratings news on GrowGeneration click here.

Shares of GrowGeneration closed at $22.58 yesterday.

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