Hexo shares slide 3.4% premarket as Oppenheimer downgrades stock to perform from outperform

Ciara Linnane - finance.yahoo.com Posted 5 years ago

Shares of Quebec, Canada-based medical cannabis company Hexo Corp. fell 3.4% in premarket trade Tuesday, after Oppenheimer downgraded to stock to perform from outperform and said it sees greater gross margin pressure than expected when it first initiated coverage of the stock in February. "With our updated forecasts and incorporating Newstrike, we now view shares as more fairly valued," analyst Rupesh Parikh wrote in a note to clients. Hexo acquired Newstrike Brands in March in an all-stock deal valued at about C$263 million ($197 million). He noted the stock's 63% year-to-date gain, which compares with an 18% rise in the S&P 500 and is well ahead of some of the company's peers. "Although we are stepping to the sidelines, we still see many positives to the HEXO story longer term and believe the name should remain on the radar for investors," said Pariksh.

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