Cannabis company Tilray Brands, Inc. (NASDAQ:TLRY) (TSE:TLRY) is slated to release its first quarter Fiscal 2023 results on October 7, before the market opens. Tilray Brands is focused on medical cannabis research, cultivation, processing, and distribution of cannabis products worldwide. TLRY stock has lost 59.7% so far this year.
The Street expects Tilray to post a diluted loss of $0.07 per share in Q1, one cent better than its prior-year period’s loss of $0.08 per share. Meanwhile, revenue is pegged at $156.85 million, representing a year-over-year decline of 6.6%, but 2.3% higher than Q4FY22 revenue of $153.32 million.
Analysts are Cautious of Impacts from Macro Headwinds
Recently, Barclays analyst Gaurav Jain slashed the price target on TLRY stock to $2 (32.9% downside potential) from $4.50 while maintaining a Sell rating.
Jain sees the tightening of credit and the oversupply in the Canadian cannabis industry as the two main headwinds for Tilray’s quarterly performance. Also, he sees consolidation taking place in the cannabis industry as competition rises. Furthermore, he suggests that Tilray should focus on controlling its operating expenses to earn healthy operating cash flows.
Similarly, analyst Neal Gilmer of Haywood maintained a Hold rating and price target of $4 (34.2% upside potential) on Tilray ahead of its results.
Gilmer slightly lowered the estimates in his model owing to the “lumpy international cannabis sales, the impacts of foreign exchange on various business segments, seasonality, and continuing competition in the Canadian market.”
Although Gilmer believes in Tilray’s long-term potential, he noted that short-term glitches, including temporary shutdowns of provincial distributors in British Columbia and Ontario, may have impacted Tilray’s Q1 results.
What is the Target Price for Tilray?
On TipRanks, the average Tilray Brands price target is $4.31, which implies 44.6% upside potential. Tilray stock has a Hold consensus rating based on two Buys, five Holds, and two Sells.
Ending Thoughts
Tilray Brands is one of the largest players in the cannabis health and wellness industry. However, temporary headwinds including rising inflation, regulatory risks, and oversupply seem to be impacting the industry as a whole. Investors may want to await more clarity from management during the earnings call to make informed investment decisions.
