What happened
Shares of marijuana stock Canopy Growth (CGC -0.57%), once the biggest name in legal marijuana, continued to shrink on Monday. As of 11:35 a.m. ET, the stock was down 9.3%.
This morning, Piper Sandler (NYSE: PIPR) cut its rating on Canopy Growth stock from neutral to underperform (i.e., sell) with a $7 price target.
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So what
The new price target sits 36% below where Piper previously projected Canopy stock to be heading -- and well below today's stock price, implying there may be a further 20% downside risk.
Canopy's sales are under pressure "across its business," TheFly.com said in a note covering the analyst's new rating. The company is losing market share in recreational marijuana in Canada, and its U.S. sales -- which weren't that big to begin with -- are down 30% since August.
Now what
The situation is getting so bad that Canopy could be worth even less than the analyst's new price target implies. No sooner had Piper Sandler assigned the $7 price target, in fact, than it proceeded to say that a "sum of the parts" analysis implies Canopy stock could be worth just $6 a share, or even $5.
After hearing that, it sure sounds like this analyst plans to downgrade Canopy stock even more.
