Marijuana stock Aphria (APHA) declined notably on Monday, shedding almost 5.8% of its value. While investors have already digested last week's news of the company's merger with peer Canadian weedie Tilray (TLRY), other factors might be affecting sentiment on the stock.
As is usually the case in notable mergers, several prognosticators tracking Aphria (and Tilray, while we're at it) revised their analyses. It seems that the ones getting more bearish on Aphria are catching the ears of investors.
After Stifel Financial's Andrew Carter downgraded his recommendation Thursday on Aphria (to hold) just after the merger announcement, Canaccord Genuity's Matt Bottomley cut his own recommendation on Aphria to hold from the previously hopeful speculative buy. Bottomley opined that current Aphria stockholders are effectively getting a fair deal in the merger.
On the other hand, fellow prognosticators John Zamparo of the CIBC and Cormark Securities' Jesse Pytlak both raised their price targets on Aphria. The former bumped his 39% higher to 12.50 Canadian dollars ($9.77), and the latter increased his 34% to CA$10.75 ($8.40). Both are maintaining what amounts to buy recommendations on the stock.
Since marijuana stocks keep getting blasted with bad news, investors are probably looking for much more enthusiastic recommendations to support their investment. Given that the Aphria bulls are really only adding a dollar or several at best to their price targets after the merger announcement, those recommendations don't seem to be forthcoming.