Jefferies upgrades Aurora Cannabis to hold as value better reflected in stock price

• Jefferies has upgraded Aurora Cannabis (NASDAQ:ACB) to hold from underperform but cut its price target to C$8.56 (8% downside).
• Analyst Owen Bennett writes that while the company's operational weakness continues and a $1B shelf offering from March "means some kind of US move is much more likely," the share price reflects the reality of the situation.
• "The company is still losing money — its cash from operations seeing another outflow of C$66mn in the most recent Q, and we do not see the company being EBITDA poisitive until FY23," Bennett notes.
• "The main bull argument for much of the Canadian names in recent times has been U.S. optionality [and] ACB is no different," he added.
• Bennett says that U.S. multi-state operators are more attractive.
• In May, Aurora established a $300M at-the-market equity offering.

This was corrected on 07/21/2022 at 4:50 AM. Jefferies price target is C$8.56 on the TSX. Based on yesterday's closing, Jefferies new price target represents 8% downside.