Shares of Cronos Group (CRON -0.91%) were jumping 10.9% higher as of 3:45 p.m. EST on Wednesday after MKM Partners analyst Bill Kirk upgraded the stock to a buy from a neutral rating. Kirk thinks Cronos is more attractively valued after the stock sank yesterday on news of a delay of at least 15 days in filing its annual report for 2019.
Analyst upgrades should typically be taken with a grain of salt. In this case, though, Kirk seems to have made several good points about Cronos Group. He doesn't think the delay of the regulatory filing is too concerning. Kirk also likes Cronos' partnership with tobacco giant Altria and the nice cash position that relationship brings for Cronos.
It's important to note that Kirk also lowered his price target for Cronos from 12 Canadian dollars ($8.96) per share to CA$11 ($8.21) per share. However, this still represents an upside potential of nearly 40% for the marijuana stock.
Cronos Group could report its 2019 fourth-quarter and full-year results later this month. However, it's still uncertain as to exactly when the company will provide its Q4 update. Cronos is conducting an internal review of the recognition of revenue for several bulk resin purchases and wholesale product sales. The company won't be able to submit its annual report to the SEC or release its Q4 results until this review is completed.