New investors have plenty to consider when determining which cannabis stock is the best choice to buy at this point. Some of the hottest cannabis stocks have had such a strong run that they’re now potentially overpriced, while some of the laggards have fallen behind the competition in securing partnerships and expanding their businesses.
Benzinga took a look at what Wall Street analysts have to say about top U.S.-listed cannabis stocks to determine which single stock is their consensus top cannabis stock to buy.
Here’s a look how the contenders stack up, according to data from the Wall Street Journal.
Of the 11 analysts rating Canopy Growth Corp CGC 5.3%, 10 analysts have a Buy rating. That 91-percent Buy rating percentage might seem like enough to make Canopy the clear winner. However, the mean price target of those analysts is $69.19, and the 36-percent potential near-term upside isn’t as much as some other cannabis stocks.
There are nine analysts covering Aphria Inc APHA 1.19%, and six (67 percent) of those analysts have Buy ratings. Aphria’s median price target of $14 suggests 93-percent upside from current levels.
Four out of the six (67 percent) analysts that cover Aurora Cannabis Inc ACB 3.1% have Buy ratings. The average price target of $10.83 suggests 54-percent near-term upside.
Cannabis real estate investment trust Innovative Industrial Properties Inc IIPR 1.12% is a perfect three for three in a small sample of Buy ratings from analysts. Unfortunately, the average price target of $53.17 suggests 13-percent potential downside, eliminating the stock from the running.
Of the seven analysts that cover Cronos Group Inc CRON 1.14%, five (71 percent) have Buy ratings. However, after the stock’s 194-percent six-month gain, the average analyst price target of $20 suggests only 9 percent additional near-term upside.
There are 12 analysts covering cannabis pharma company GW Pharmaceuticals PLC GWPH 2.31%, and all but one (93 percent) have Buy ratings on the stock. The average price target of $175.92 also represents 30.3-percent near-term upside as well.
Only half of the six analysts covering Tilray Inc TLRY 5.68% have Buy ratings on the stock, but the average price target of $131.25 suggests 65.4-percent of near-term upside.
Four out of five analysts covering cannabis biotech stock Zynerba Pharmaceuticals Inc ZYNE 34.6% have Buy ratings. The stock has the most potential upside of all, with the average target price of $18.40 representing 385 percent upside.
And The Winner Is…
Zynerba is clearly a stock for which a handful of analysts have very high hopes. However, five analysts is far from a Wall Street consensus, and Zynerba remains a niche biotech stock and a high-risk/high-reward speculative bet for now.
Wall Street seems most optimistic about Canopy Growth Corp and GW Pharmaceuticals. Each stock has at least 11 analysts covering it, each has a more than 90 percent recommendation rate and each has more than 30 percent near-term upside.
The one analyst that doesn’t rate Canopy a Buy rates it a Sell, whereas the one analyst that doesn’t rate GW Pharma stock a Buy rates it a Hold. Therefore, the tie breaker in an extremely close race goes to Wall Street’s favorite cannabis stock to buy: GW Pharmaceuticals.
The ETFMG Alternative Harvest ETF (MJ) was trading at $33.20 per share on Tuesday morning, down $0.60 (-1.78%). Year-to-date, MJ has gained 2.08%, versus a -1.07% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Benzinga.