Pot Stocks Skyrocket on Canopy Growth BofA Upgrade + Top Gainers of the Week

Canopy Growth Jumps Over 40% This Week as Market Rebounds

Other Top Cannabis Stocks Rise as Much as 65%

Just when it looked like cannabis stocks were set to implode following poor earnings from Canopy Growth (TSX: WEED) (NYSE: CGC), Aurora Cannabis (TSX: ACB) (NYSE: ACB), Cronos Group (TSX: CRON) (NASDAQ: CRON) and Tilray (NASDAQ: TLRY) Bank of America (NYSE: BAC) analyst Christopher Carey’s upgrade of Canopy shares could not have come at a better time. Coupled with stronger than expected earnings from U.S. multi-state operators (MSO) Trulieve (CSE: TRUL) (OTCQX: TCNNF), Curaleaf (CSE: CURA) (OTCQX: CURLF) and Green Thumb (CSE: GTII) (OTCQX: GTBIF) have provided a renewed sense of investor confidence and pot stocks are soaring as a result.

Following Canopy’s weak second-quarter earnings last week which featured a massive $374.6 million loss, shares of the company’s stock plummeted to under $20 per share for the first time since late 2017. The company reported revenue for the quarter of $76.6 million, well off the $107 million forecasted by analysts.

BofA analysts Christopher Carey and Lisa Lewandowski correctly predicted Canopy would miss big on its earnings when it downgraded the stock in September from a buy to neutral stating the valuation of the Canadian licensed producer (LP) and its peers were “far too high”. Shares of Canopy quickly declined by roughly 40% since the September downgrade before bottoming out on Monday. Both Canopy and Aurora blamed Canada’s botched retail rollout as the driving force behind their earnings miss.

In the eyes of BofA, the sell-off was overdone prompting Carey to upgrade Canopy stock from neutral to buy on Wednesday. BofA kept its $24 per share price target in place saying Canopy still remains a “show me story.” The analyst added, “To be clear, things are by no means perfect. Canopy remains a show-me story with much to prove and a new CEO still ahead. However, the worst looks over and, if momentum returns, the market may again contemplate what Canopy could become.”

Carey believes Canopy’s shares are much more attractive at current levels and the company has the potential to beat Wall Street estimates on future earnings “for maybe the first time in Canopy’s history as a public company.”

Since hitting a low of $18.23 on Tuesday, shares of WEED have roared back to life this week rising as much as 56% in the past 2 trading sessions. Shares of WEED stock closed trading today at $27.03 per share, up 15.07% on the day.

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Canopy shareholders weren’t the only ones seeing green this week as the majority of pot stocks saw double-digit gains. Below is a quick recap of the top 10 cannabis stock gainers of the week.

1. The Green Organic Dutchman (TSX: TGOD) (OTCQX: TGODF)