Cronos Group (CRON) Stock Is Climbing On Double Upgrade

Cronos Group CRON Stock News

Cronos Group Inc (NASDAQ: CRON) is up nearly 8% early in the trading session this morning, but with no press releases or SEC filings, many are wondering why. Ultimately, the gains seem to be the result of a rare double upgrade. Here’s what’s going on:

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Analysts See Value In CRON Stock

As mentioned above, Cronos is climbing in the market this morning after the stock was the subject of a rare double upgrade. Bank of America analyst Christopher Carey upgraded the stock from an underperform to a buy rating

The analyst also increased the price target on the stock by 53.8%. The new price target set comes in at $20, up from $13 and representing a potential upside of 39%.

Ultimately, Carey sees CRON as beeing in a strong position to take a large share of the world’s largest markets for cannabis derived compounds. Of course, strong positioning early on sets the stage for leadership in the long run.

Moreover, the analyst pointed to the fact that the company has $2.4 billion in cash sitting on its balance sheet and that the company is starting to use this money to build out capacity, infrastructure, and further leadership. This, combined with the partnership with Altria has the potential to cement the company’s position as a potential leader in the space.

Here’s a key snippet from Carey on CRON:

While clearly a high multiple even vs peers, following recent mgmt comments, we have improved confidence CRON is near announcing its launch, in our view a significant catalyst: (1) improving near-term visibility in the largest market for cannabis derived compounds in the world, (2) CRON beginning to flex its near group-leading balance sheet (C$2.4bn cash) and partnerships (Altria, MO) to begin a transformation we see creating a vastly different co. in the years ahead.

Why This News Is Moving The Needle

At the end of the day, analyst opinions are regarded highly by investors. After all, analysts make their money through researching and making accurate predictions of market movement. While it’s never a good idea to blindly follow anyone’s opinion, it’s a good idea to at least pay attention to the opinions of analysts.

It’s also worth mentioning that in the case of Cronos Group, this wasn’t your run of the mill single upgrade. The analyst skipped the hold rating and jumped right to the sell. That is incredibly rare, leading to further excitement among investors.

Final Thoughts

Cronos Group represents a compelling investment opportunity in cannabis. The company is one of very few that have inked multi-billion dollar deals with United States companies. This gives it backdoor access to the United States CBD market and what many believe is a coming cannabis market in the region.

Aside from the access to the United States, the agreement gave the company $2.4 billion to work with, and it is starting to use it to further solidify its role as a global cannabis leader.

All in all, CRON is a stock that’s worth watching.

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What Do You Think?

Where do you think CRON stock is headed moving forward? Join the discussion in the comments below!

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