Cannabis Stock Rally Cut Short after Downgrade

Currently, the majority of analysts rate ACB a "hold"

Assistant Editor
May 22, 2020 at 3:08 PM
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The shares of Aurora Cannabis Inc (NYSE:ACB) are down 4.4% to trade at $16.44 today, after Jefferies downgraded the equity to "underperform," and raised its price target to $10 from $8.40. The analyst in coverage isn't buying the stock's recent post-earnings surge, noting "the CBD space is experiencing significant headwinds currently."

The majority of analysts are still tip toeing around Aurora Cannabis stock. Of the 17 in coverage, 11 sport a tepid "hold." However, the consensus 12-month price target of $19.12 clocks in at a high 16% discount to current levels, which could signal price-target cuts for ACB in the near future.

On the charts, ACB has been suffering for much of the past year. After bottoming out to $5.30 -- its lowest level in four years -- on May 14, Aurora Cannabis stock began to stage a comeback. Now up over 211% from that crevice, the security has found run headfirst into its 120-day moving average -- a trendline that acted as a level of resistance as far back as June 2019.

ACB Chart May 22

There's a notable amount of activity occurring in Aurora Cannabis's option pits. Over 36,000 puts have changed hands today, two times the average intraday amount. One of the most popular contracts looks to be the weekly 5/22 15-strike put, where new positions are being opened.

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