MJ - Sundial Growers (SNDL) Stock Pops 10% Ahead of Q1 Earnings
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Sundial Growers (NASDAQ:SNDL) stock is climbing 10% in early trading. The cannabis company reports its first-quarter results after the market closes today.
Ahead of the Q1 snapshot, retail and institutional investors appear to be increasingly bullish on Sundial Growers.
On May 3, BMO Capital raised its rating on SNDL stock to “market perform” from “underperform.” The firm noted that Sundial’s gross profit turned positive in Q4 and that the company is investing in many initiatives.
In a May 6 column, InvestorPlace contributor Faisal Humayun predicted that the company’s shares could “double.” Humayun noted that Sundial’s sales had jumped 63% in Q4, versus the same period a year earlier.
“If this momentum can sustain in 2022, SNDL stock is positioned to trend higher,” Humayun wrote. He added that the firm “has a strong balance sheet,” along with “the financial flexibility to pursue .. growth” with acquisitions and through its current businesses.
Meanwhile, noting that Sundial has become very popular, FXStreet reports that retail investors believe that shares could benefit from a short squeeze.
Will High Inflation Weigh on SNDL Stock?
On a negative note, however, InvestorPlace contributor Josh Enomoto wrote that high inflation could cause many Canadian marijuana users to buy cannabis from unlicensed retailers. This dynamic has already hurt legal cannabis companies, such as Sundial.
Over the last year, the ETFMG Alternative Harvest ETF (NYSEARCA:MJ) has tumbled about 60%. SNDL stock has retreated 45%.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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