ATB Capital upgrades Hexo Corp.(HEXO:NSD) to Sector Perform

STA Research
by: STA Research

ATB Capital upgraded Hexo Corp. to Sector Perform from Underperform, and maintained the $1.10 target on the company’s stock.

Based on the HEXO Corp. Common Shares stock forecasts from 4 analysts, the average analyst target price for HEXO Corp. Common Shares is USD 1.94 over the next 12 months. HEXO Corp. Common Shares’s average analyst rating is Hold . Stock Target Advisor’s own stock analysis of HEXO Corp. Common Shares is Bearish, which is based on 1 positive signals and 6 negative signals. At the last closing, HEXO Corp. Common Shares’s stock price was USD 0.60. HEXO Corp. Common Shares’s stock price has changed by +0.04% over the past week, -0.01% over the past month and -90.78% over the last year.

What we like:

Underpriced compared to book value

The stock is trading low compared to its peers on a price to book value basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

What we don’t like:

Poor risk adjusted returns

This company is delivering below median risk adjusted returns in its peers. Even if it is outperforming on returns , the returns are unpredictable. Proceed with caution.

High volatility

The total returns for this company are volatile and above median for its sector over the past 5 years. Make sure you have the risk tolerance for investing in such stock.

Below median dividend returns

The company’s average income yield over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income.

Negative cashflow

The company had negative total cash flow in the most recent four quarters.

Negative earnings

The company had negative total earnings in the most recent four quarters.

Low Earnings Growth

This stock has shown below median earnings growth in the previous 5 years compared to its sector

 

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