What happened

After tumbling nearly 5% in Monday trading, shares of Canadian cannabis company Canopy Growth (NYSE:CGC) rebounded Tuesday, closing the day up 11%.

You can thank BMO Capital for that.

Marijuana plants

Image source: Getty Images.

So what

With Canopy Growth stock down by more than half over the past 52 weeks of trading, this morning, Canadian banker BMO finally upgraded the shares from "market perform" (which it has demonstrably failed to do) to "outperform" -- which BMO hopes it now will.

As BMO explained in its note, covered on StreetInsider.com today, Canopy has suffered from "industrywide challenges" over the past year, as well as a "suboptimal [recreational] product mix." Few analysts who follow the stock see Canopy Growth turning profitable before 2023, and some even think it will be losing money in 2024. But according to BMO, "there is potential upside to Street expectations for FQ3/20 driven by the company's pivot into a rec product mix that should now be better aligned with demand."  

Now what

Mind you, even BMO isn't predicting that Canopy will turn suddenly profitable this year. It's only predicting Canopy might prove slightly less un-profitable than everyone else thinks. But as BMO opines, "even a modest beat in FQ3/20 results could begin to shift investor sentiment on the stock."

With the stock down so much already, maybe there really is nowhere to go but up at this point?