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Canadian cannabis giant Tilray Inc. (TLRY) is scheduled to report its financial results for the second quarter of fiscal 2022 on Monday, Jan. 10, as its stock continues to sink ahead of the event. It was last seen down 1.71% at around $6.51.

And it seems the stock will "face pressure" following the release of the quarterly report, Cantor Fitzgerald's analyst Pablo Zuanic said in a Thursday note, "unless the company issues bullish forward commentary."

The Analyst              

Zuanic lowered his 12-month price target to $7.40 from $11.80 while maintaining a Neutral rating on Tilray's stock.

The Thesis

The analyst identified three "true sentiment drivers," including a 16% drop in recreational sales in the November quarter in a market that grew 5% over the same period, stable export trends, and cannabis gross margins that "may be down due to operating deleverage and ongoing price deflation."

Moreover, a further decline in reported revenues is possible due to wholesaler destocking. December saw a similar scenario, with sales down 3% month-over-month for Tilray, compared to a market that improved by 8% over the same period, as per Hifyre data.

Nevertheless, the analyst expects that company's second-quarter sales will total $163 million, compared to the FactSet consensus of $174 million. He also projects a total EBITDA of $10 million compared to FactSet's $14 million.

Breckenridge Distillery Deal

Last month, Tilray revealed that it is acquiring Breckenridge Distillery. And while the company did not disclose the terms of the deal, it is known that the transaction will be immediately accretive to EBITDA.

"An iconic addition to Tilray's platform," according to Irwin D. Simon, Tilray's chairman and CEO, who added that Breckenridge Distillery will complement the company's existing SweetWater brand.

"As with the Sweetwater craft beer deal," closed in 2020, "management does not see these deals as 'diversification' moves, but as growth levers," the analyst said, adding he is not critical of the deal but relatively neutral. Zuanic valued Tilray's cannabis business at 9x CY22 cannabis sales that are "well above the peer group average, which is in the low to mid-single digits."