Stifel reiterates sell rating on Aurora Cannabis after its acquisition of TerrFarma

Stifel analyst W. Andrew Carter on Wednesday reiterated his sell rating for Aurora Cannabis Inc.
ACB,
+6.87%
ACB,
+0.66%
after the Canadian cannabis company announced plans to buy TerraFarma Inc., the parent company of craft cultivator Thrive Cannabis, for up to C$68 million ($54 million), including C$38 million plus two earnouts totaling C$30 million. Carter said the Thrive acquisition supports the company’s premium strategy and marks a step toward its goal to generate positive Ebitda. “With revenue yet to stabilize, growth uninspiring, and the convertible due 2024 looming large, we believe
the shares will continue to be under pressure until the valuation fully rightsizes for the challenges ahead,” Carter said. Shares of Aurora Cannabis are down 32% so far in 2022, compared to a drop of 15.2% by the Cannabis ETF
THCX,
+2.30%.