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Cantor Raises Aurora Cannabis Target After Guidance Update

Aurora Cannabis Inc. (NYSE: ACB) has announced another round of reductions in its selling, general and administrative (SG&A) expense and consolidation of manufacturing facilities.The latest announcements should allow the company to expand gross margins by as much as 8 percentage points, according to Cantor Fitzgerald.The Aurora Cannabis Analyst Cantor's Pablo Zuanic maintained an Overweight rating for Aurora Cannabis, while raising the price target from 27 Canadian dollars ($19.89) to 29 Canadian dollars ($21.37).The Aurora Cannabis Thesis Talks with the CEO and CFO reveal that the planned cuts should neither disrupt production nor prevent Aurora Cannabis from capitalizing on market opportunities and delivering on its growth strategy, Zuanic said in the note.He mentioned that the announcements included: * SG&A of $40-$45 million per quarter in fiscal 2021, with reductions in corporate and production staff as well as third-party experts * Completion of the consolidation of production facilities in Canada by January * Inventory write-downs of $100 millionAlthough management did not issue any revenue guidance for the June quarter, the tone was "more upbeat" than its peer Canopy Growth (NYSE: CGC), which is losing share, the analyst said.Aurora Cannabis confirmed that the industry had returned to steady growth. Zuanic added that the company had kept its EBITDA guidance unchanged at +$51 million for fiscal 2021.Price Action Shares of Aurora Cannabis were trading almost flat at $13.58 at the time of publication Wednesday.Related Links Why Aurora Cannabis Stock Is Trading Higher Today Canopy Growth Analyst Sees Increasing Cannabis Market Share, Little Stock UpsideSee more from Benzinga * Zoom Video Analyst Says Growth Is More Than A Coronavirus Bump: 'Lasting Paradigm Change' * Baird Charges Apple Price Target During WWDC20, Expects 5G iPhone This Fall * BofA Bullish On Allegiant, Southwest, Says Leisure Travel Recovering(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved. Read More...

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Aurora Cannabis Inc. (NYSE: ACB) has announced another round of reductions in its selling, general and administrative (SG&amp;A) expense and consolidation of manufacturing facilities.” data-reactid=”19″>Aurora Cannabis Inc. (NYSE: ACB) has announced another round of reductions in its selling, general and administrative (SG&A) expense and consolidation of manufacturing facilities.

The latest announcements should allow the company to expand gross margins by as much as 8 percentage points, according to Cantor Fitzgerald.

The Aurora Cannabis Analyst

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Cantor’s Pablo Zuanic maintained an Overweight rating for Aurora Cannabis, while raising the price target from 27 Canadian dollars ($19.89) to 29 Canadian dollars ($21.37).” data-reactid=”22″>Cantor’s Pablo Zuanic maintained an Overweight rating for Aurora Cannabis, while raising the price target from 27 Canadian dollars ($19.89) to 29 Canadian dollars ($21.37).

The Aurora Cannabis Thesis

Talks with the CEO and CFO reveal that the planned cuts should neither disrupt production nor prevent Aurora Cannabis from capitalizing on market opportunities and delivering on its growth strategy, Zuanic said in the note.

He mentioned that the announcements included:

  • SG&A of $40-$45 million per quarter in fiscal 2021, with reductions in corporate and production staff as well as third-party experts
  • Completion of the consolidation of production facilities in Canada by January
  • Inventory write-downs of $100 million

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Although management did not issue any revenue guidance for the June quarter, the tone was “more upbeat” than its peer Canopy Growth (NYSE: CGC), which is losing share, the analyst said.” data-reactid=”30″>Although management did not issue any revenue guidance for the June quarter, the tone was “more upbeat” than its peer Canopy Growth (NYSE: CGC), which is losing share, the analyst said.

Aurora Cannabis confirmed that the industry had returned to steady growth. Zuanic added that the company had kept its EBITDA guidance unchanged at +$51 million for fiscal 2021.

Price Action

Shares of Aurora Cannabis were trading almost flat at $13.58 at the time of publication Wednesday.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Related Links
Why Aurora Cannabis Stock Is Trading Higher Today
Canopy Growth Analyst Sees Increasing Cannabis Market Share, Little Stock Upside
” data-reactid=”34″>Related Links
Why Aurora Cannabis Stock Is Trading Higher Today
Canopy Growth Analyst Sees Increasing Cannabis Market Share, Little Stock Upside

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="See more from Benzinga” data-reactid=”35″>See more from Benzinga

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.” data-reactid=”40″>© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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