Following a woeful year, the end of last week provided a sense of turnaround for investors of Aurora Cannabis (ACB). The stock shot up over 90% after the release of a better-than-expected earnings report.The company delivered on several key issues weighing on investors’ minds ahead of the results. First of all, Aurora delivered much better sales than anticipated. Revenue of C$75.5 million beat the consensus calls for C$67 million, and represented 18% quarter-over-quarter growth. Recreational cannabis sales jumped 24% to CA$41.5 million, boosted by the success of value brand Daily Special’s February launch.Cost cutting measures have also been bearing fruit, significantly reducing cash burn in the quarter. The company exited the quarter with C$230.2 million of cash in the coffers.Additionally, the company's aim of reaching positive adjusted EBITDA in FQ2021 appears on target. Although still a way off from being positive, Aurora reported an adjusted EBITDA loss of CA$45.9 million, (excluding one-time staff reduction termination costs), a vast improvement on the previous quarter’s adjusted EBITDA loss of CA$80.3 million.Bottom line, though, the company is still losing money, with a FQ3 net loss of CA$137.4 million, or CA$1.37 per share, far above the consensus estimates of CA$0.77.Even though CIBC analyst John Zamparo believes Aurora is “making progress on cost cutting, while increasing its consumer market share and maintaining its leading medical business,” the analyst points out that the company still has “much work to do.”A particular issue needs solving, and quickly, according to Zamparo: “Regardless of progress on cost cutting, if Ontario stores do not start opening in the somewhat near future, industry revenues will not reach the levels required for most firms to reach profitability, and we believe Aurora is no different. A spike in online sales is encouraging, but nowhere near sufficient to supplant brick and mortar. As Ontario goes, so goes this industry.”To this end, Zamparo reiterates a Hold rating on Aurora shares, while lowering his price target from C$27 to C$14. The figure represents possible downside of 9% from current levels. (To watch Zamparo’s track record, click here)Zamparo’s assessment gets the rest of the Street’s backing. A Hold consensus rating is based on 9 Hold ratings, 3 Buys and 2 Sells. The average price target is slightly above the CIBC analyst’s, and at C$14.29 implies downside of 7%. (See Aurora stock analysis on TipRanks)To find good ideas for cannabis stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
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Biotechnology company Moderna announced that its early-stage human trial for a coronavirus vaccine produced COVID-19 antibodies in all trail participants. (Bloomberg) — The U.S. Supreme Court rejected an appeal by Venezuela in its fight to retain control of oil refiner Citgo Holding Inc., putting the country a step closer to losing its largest asset.The justices, without comment on Monday, left intact a federal appeals court victory for a defunct Canadian gold mining company seeking to force the sale of Citgo’s parent company. The gold miner, Crystallex International Corp., is trying to collect a $1.4 billion arbitration award, most of which remains unpaid.The rebuff leaves Venezuela at risk of losing a much-needed source of revenue in Citgo. The country’s opposition leader, Juan Guaido, has been fighting to safeguard the assets since taking control of Citgo as part of his power struggle with President Nicolas Maduro.Crystallex is seeking compensation for Venezuela’s 2011 takeover of the company’s gold mining operations near Las Cristinas. Crystallex won in arbitration in 2016, and a Philadelphia-based federal appeals court ruled last year that the shares could be seized to satisfy the award. The gold miner must still secure a U.S. Treasury Department license before the shares could be auctioned.Crystallex is the furthest along of a group of creditors, including oil company ConocoPhillips, that are eyeing the shares of Citgo’s parent company, PDV Holding Inc.Venezuela and its national oil company, Petroleos de Venezuela SA, asked the Supreme Court to review the appeals court ruling, saying it conflicts with a federal sovereign immunity law. Crystallex urged the Supreme Court not to hear the case.The case is Bolivarian Republic of Venezuela v. Crystallex, 19-1049.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.