Canopy Growth: Constellation Bid Appears Unlikely, For Now
Canopy Growth rallied 14% on the hiring of the CFO from Constellation Brands on the hopes of a bid. Constellation Brands has a large debt position suggesting a large bid is highly unlikely. An executive void during the Cannabis 2.0 rollout is an unwelcome outcome of hiring a new CEO. The price target remains $10, or roughly 5x EV/FY20 sales target. Canopy Growth ( CGC ) finally hiring a new CEO is not the recipe for a stock rally in an expensive stock. In addition, Constellation Brands ( STZ ) isn't likely to launch a takeover bid costing upwards of $10 billion when the company lacks the cash. My previous investment thesis placing the stock at $10 remains intact with the further delayed rollout of Cannabis 2.0 and a new CEO not starting until January. Read the full article on Seeking Alpha. Update - December 11, 2019 The stock is trying to hold $20. A positive plug from Cramer today is helping Canopy Growth, but ...