The stock markets often spring up some intriguing storylines. And as markets opened on Wednesday, investors were treated with a bittersweet one.
Shares of the world’s largest cannabis company, Canopy Growth (CGC) jumped as much as 3.6% during pre-market trading, buoyed by reports that analyst firm Piper Jaffray would start covering the stock, along with peer weed company Tilray (TLRY) with an Overweight rating.
Piper Jaffray’s opening price target of $40 on the stock is at a 35% upside from Canopy Growth’s last close. The stock is also covered by Beacon and Canaccord Genuity.
Meanwhile, none of this festivity was visible in Constellation Brands (STZ), which holds a 38% stake in the Canadian marijuana firm. In fact, the stock suffered a massive blow the same day, tumbling 12.5% during pre-market trading.
The brewer of Corona beer on Wednesday reported disappointing fiscal 2019 guidance, predicting weakness in spirit and wine business. Constellation Brands said it expects low single-digit fall in operating income and sales in the current quarter. Otherwise, the company’s quarterly results beat analysts’ estimates.
STZ shares have declined 22% in the trailing 52 weeks. CGC shares have declined 12% in the trailing 52 weeks.
Constellation Brands raised its stake in Canopy Growth from 10% to 38% in August 2018, with an additional $4 billion in investment. The agreement, which sent STZ shares up 4% and CGC shares down 8%, was closed in November last year.
Constellation Brands has an average 12-month price target of $229.60, which represents a 33% upside from its last close.