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Why Canopy Growth Stock Popped Today | The Motley Fool

What happened

Shares of Canopy Growth (NASDAQ:CGC) (TSX:WEED) climbed 6.5% on Tuesday, following bullish analyst commentary. 

So what

MKM Partners analyst Bill Kirk boosted his rating on Canopy Growth’s stock from neutral to buy. He sees the cannabis company’s Canada-listed shares climbing to $55 Canadian dollars ($45.58), or roughly triple their current price. 

Canopy Growth’s shareholders could enjoy hefty gains in the year ahead. Image source: Getty Images.

Kirk said expectations for Canopy and other marijuana stocks are so low that its shares are now presenting investors with a “very favorable” risk-to-reward opportunity. Canopy’s revenue growth will reaccelerate along with Canada’s economy as the COVID-19 crisis subsides, according to Kirk, while the company’s recent supply chain improvements should also help to boost sales.

Now what

Shareholders will receive an update on Canopy’s growth initiatives and operational improvements when it reports its fiscal 2021 fourth-quarter financial results before the financial markets open on June 1. 

Looking further ahead, Kirk sees Canopy making a major push into the U.S. cannabis market, driven in part by its partnerships with Constellation Brands and Southern Glazer’s Wine & Spirits. While federal legalization remains uncertain, he notes that the U.S. marijuana industry “is worth more than all other markets combined.” 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.



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