Canopy Growth (CGC -2.43%) was a star marijuana stock on Tuesday, closing 11% higher on the day at $23.92.

One likely factor in this rise is an analyst update on the stock from prominent Canadian investment bank Bank of Montreal's BMO Capital Markets. Analyst Tamy Chen upgraded her recommendation on the stock, to outperform (i.e., buy) from the previous market perform (neutral). She also significantly raised her price target on Canopy Growth's Canada-listed stock, to $40 Canadian from CA$25, or US$30 to $19.

Marijuana bush.

Image source: Getty Images.

Chen believes that with its recent shift toward more value-priced goods, Canopy Growth is poised to improve its results. 

"Following the stock's notable sell-off last year driven by a suboptimal product mix (gel caps) and industrywide challenges," Chen wrote, in a passage from the report quoted by the Financial Post, "we believe there is potential upside to Street expectations for [Q3 of fiscal 2020] driven by the company's pivot into a recreational product mix that should now be better aligned with demand."

Like most publicly traded marijuana stocks, Canopy Growth had a difficult year in 2019 on the back of poor fundamental performance and challenging conditions in the wider cannabis industry. Although it wasn't the worst-performing cannabis stock that year, it was no highflier -- its price dropped by nearly 22% over the course of the year.

Although the prospects and sentiment for pot stocks have improved lately, as has their stock price performance, many analysts remain bearish on them as investments.

Canopy Growth is slated to publish the figures for the third quarter of fiscal 2020 Chen referenced in her analysis on Feb. 14.