GRWG - GrowGeneration cut to Hold at Stifel on near-term outlook

Stifel has downgraded GrowGeneration (GRWG +3.5%) to Hold from Buy after the company reported lower than expected earnings for Q3 2021. The analysts led by Andrew Carter project a weaker near-term performance for the Greenwood Village, Colorado-based cannabis player despite its long-term growth prospects. The firm highlights GrowGeneration’s (NASDAQ:GRWG) heavy reinvestments despite softer sales growth, noting that those investments will position the company to profitably capitalize on the growth in the hydroponics category. Yet, the factors such as cost inflation and pressure on the existing infrastructure have gone unnoticed, the analysts acknowledge expecting weak near-term performance to cloud long-term performance, causing shares to remain range-bound. The price target lowered to $24 from $41 per share implies a premium of ~6.3% to the last close. Read: On Thursday, Cantor Fitzgerald projected the U.S. MSOs to rebound amid Republican-led attempts for cannabis reforms.

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GrowGeneration cut to Hold at Stifel on near-term outlook