Cowen's Bullish Take on Weed Stocks Lifts Tilray Stock

TLRY has shed 76% since its mid-September high

by Patrick Martin

Published on Jan 8, 2019 at 9:26 AM

The shares of Tilray Inc (NASDAQ:TLRY) are up 1.7% in electronic trading, after Cowen said U.S. cannabis sales will reach $80 billion by 2030 -- $5 billion more than its previous forecast -- citing larger-than-forecast gains in reported cannabis use among adults. Cowen also noted that beer sales declined 2018 on increased cannabis use, and said this growing market creates a revenue opportunity big tobacco companies.

More specifically, Cowen dished out an "outperform" rating on Tilray. Overall though, analyst sentiment is mixed toward the weed stock, with two rating TLRY a "strong buy" and the two rating it a tepid "hold." The consensus 12-month price target, on the other hand, is quite optimistic, sitting up at $140, a 94.7% premium to last night's close at $71.90. 

On the charts, Tilray stock has been consolidating below the $72 level for the past month. Right around here is its 10-day and 20-day moving averages, which have served as a ceiling since late November. While TLRY is off 76% from its Sept. 19 record high of $300, the weed stock is still up over 320% since its mid-July initial public offering (IPO) price of $17 per share. 

Short interest has tapered off recently, down 5.5% in the last two reporting periods. However, this is still double the low from the Aug. 15 reporting period, and represents a whopping 35.2% of TLRY's total available float.

In the options pits, speculators have been equally split between calls and puts in recent weeks. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows 10,366 calls have been bought to open in the last 10 days, compared to 10,721 puts.

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