Shares of Tilray Inc (NASDAQ:TLRY) finished lower on Friday, still feeling the sting after Northland Capital Markets analyst Mike Grondahl downgraded the marijuana company's stock to Market Perform from Outperform.
The stock's valuation was "complex," according to MarketWatch. The analyst added that "one needs to fully appreciate the pendulum swinging toward medicinal and recreational use of cannabis globally."
After recovering in the regular session, the stock closed 2.76% lower at US$77.89 in New York, despite having announced a new cannabis supply deal with Namaste Technologies (CVE:N, OTCMKTS:NXTTF).
Grondahl said there was still a lot to like about Tilray and he is confident it will be a big player in the cannabis market, and specifically, in the Canadian recreational market, once it launches on October 17.
"We have highlighted many positive attributes for Tilray Including Privateer Holdings and Leafly, its partnership with Novartis/Sandoz and distribution deals with Shoppers Drug Mart, Pharmasave and others in the pharmacy space and 7 Canadian provinces," Grondahl wrote.
"However, with the recent (massive) move in the stock, we believe the risk/reward is far more balanced at this time."
According to MarketWatch, the analyst withdrew his stock price target of $60, which was based on expected 2021 revenues of US$492mln.
Still, Tilray, which went public in July, has turned in the best performance of any IPO on a US exchange so far this year, Bloomberg reported on Wednesday.
Shares of Tilray which closed 10.8% down to US$80.10 on Wednesday.
Contact Uttara Choudhury at [email protected]
--Updates shares price, adds Namaste deal--