Lazard Ltd
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LAZ Lazard Ltd
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Financials : Capital Markets | Small Cap Value
Based in Bermuda
Company profile

Lazard Ltd (Lazard) is a financial advisory and asset management company. The Company operates through two segments: Financial Advisory and Asset Management. It serves a range of clients around the world, including corporations, governments, institutions, partnerships and individuals. The Financial Advisory business segment offers corporate, partnership, institutional, government, sovereign and individual clients across the globe a range of financial advisory services regarding mergers and acquisitions (M&A) and other strategic matters, restructurings, capital structure, capital raising and various other financial matters to corporate, partnership, institutional, government, sovereign and individual clients. The Asset Management business provides investment solutions and investment management services in equity and fixed income strategies, alternative investments and private equity funds to corporations, public funds and sovereign entities.

Closing Price
$45.61
Day's Change
-1.20 (-2.56%)
Bid
--
Ask
--
B/A Size
--
Day's High
46.44
Day's Low
45.38
Volume
(Heavy Day)
Volume:
900,055

10-day average volume:
653,779
900,055

UPDATE: Cannabis rally takes a pause as lackluster earnings make gains look overdone

2:29 pm ET November 10, 2020 (MarketWatch)
Print

By Ciara Linnane, MarketWatch

Aurora's numbers 'are not really standing out as anything special or overly encouraging,' says analyst

The strong rally that has propelled cannabis stocks higher since Democrat Joe Biden won the 2020 presidential election took a pause on Tuesday, as analysts weighed in on earnings from three industry heavyweights and found little to justify some of the explosive gains.

The Cannabis ETF (THCX) has rallied 25% in the month to date, as Biden's election sparked hopes he would advance a more pro-reform agenda than incumbent President Donald Trump. The sector has struggled during Trump's administration as the Senate has blocked efforts to help companies in states that have legalized to access the federally-insured banking system.

Legalization hopes were also fueled after four states -- New Jersey, Arizona, Montana and South Dakota -- voted in favor of adult-use, (http://www.marketwatch.com/story/one-third-of-americans-could-soon-have-access-to-legal-weed-as-new-jersey-decriminalizes-cannabis-11604459978) boosting the U.S. recreational market to 15 states with more than 110 million residents.

Individual stocks have been on a tear, led by Aurora Cannabis Inc. (ACB.T) , (ACB.T) the most widely held stock on the Robinhood trading app.

Aurora reported earnings on Monday (http://www.marketwatch.com/story/aurora-cannabis-shares-up-30-premarket-as-company-posts-q1-loss-but-revenue-that-beats-estimates-2020-11-09)that Jefferies analyst Owen Bennett said don't justify the massive run-up in its shares.

"Aurora's share price as of the time of writing is running up 135% since end of day on Wednesday," said Bennett. "Some may look at this performance, which also included gains of over 20% at one point intraday today, and assume a much improved fundamental outlook and strong quarterly numbers. This is not the case, with Q1, for us, not really standing out as anything special or overly encouraging."

Aurora's revenue was ahead of expectations, but "we would argue in the details there remains reason for caution," said the analyst.

Aurora's Daily Special discount brand has been a big part of its sales, but the company is now aiming to pivot more to premium flower brands in a reset of its top line.

"For this reset to be deemed a success we would need to see any lost sales from Daily Special being more than offset (in a growing market) by sales elsewhere. This is not the case," said Bennett.

In flower, Daily Special sales declined by C$5mn ($3.9 million) while the rest of its flower business was roughly flat, while in extracts, ex CBD in the US, it only added sales of $2.2 million, "not overly impressive given the extent of Aurora's 2.0 portfolio," he said. Jefferies rates Aurora as hold with a C$6.90 price target. The stock was down 24% Tuesday.

Canopy Growth Corp. shares (WEED.T) (WEED.T) slid 3.4%, after MKM Partners' Bill Kirk said its profit did not match revenue growth, (http://www.marketwatch.com/story/canopy-growth-shares-jump-13-premarket-after-cannabis-company-posts-smaller-than-expected-loss-2020-11-09) suggesting "the incremental ROIC (return on invested capital) wasn't particularly strong perhaps led by limited margin economy priced product."

See: As pot stocks boom on hopes for U.S. legalization, Canadian cannabis companies struggle for growth (http://www.marketwatch.com/story/cannabis-stocks-rally-anew-as-canopy-and-aurora-post-results-with-tilray-still-to-come-2020-11-09)

Kirk raised his earnings estimates, but said he sees no upside in his discounted cash flow model.

"We are modeling Canopy becoming a multibillion revenue generating company with 30% EBITDA margins. This outlook would definitely be considered a 'success,' but only generates $28/share of value on the existing outstanding shares. Reiterate Neutral," he wrote.

Tilray Inc. (TLRY), which also reported late Monday, came closest of the three to a profit, with losses of just 2 cents a share and promises of adjusted profitability in the fourth quarter. Sales barely budged from last year, but executives blamed that on bulk sales last year that the company halted to focus on core businesses.

"Though we have a high degree of confidence that [Tilray] will emerge a strong player long-term in the global cannabis market, the valuation near the high end of the Canadian LP average keeps us at Neutral for the time being," said Ladenburg Thalman analyst Glenn Matson. "We would look to grow more constructive on the name once clarity emerges on a broader U.S. growth strategy or the European market sees an inflection point."

See also:Canadian cannabis company agrees to buy U.S. craft-beer maker Sweetwater, known for its '420'-branded brews (http://www.marketwatch.com/story/canadian-cannabis-company-agrees-to-buy-craft-beer-maker-sweetwater-known-for-its-420-branded-brews-11604528779)

Elsewhere in the sector Organigram Holdings Inc. shares (OGI.T) fell 22%after the company said it is offering C$60 million of units in a syndicated deal led by Canaccord. Each unit will be priced at C$1.85 and will be comprised of one share plus one half of one common share purchase warrant. Warrants will be exercisable to acquire one common shares for up to three years following the closing date at an exercise price of C$2.50 per warrant share.

Proceeds of the deal will be used to repay debt and for working capital and general corporate purposes.

Among few gainers, vape and accessories maker Greenlane Holdings Inc. (GNLN) was up 8%, Cresco Labs (CL.L) was up 1.2% and Aleafia Health Inc. was up 1.2%.

Cronos Group Inc. (CRON.T) (CRON.T) was down 2.4%, and Aphria Inc. (APHA.T) (APHA.T) was down 2.8%.

The Cannabis ETF has fallen 14% in the year to date, while the S&P 500 has gained 10%.

-Ciara Linnane; 415-439-6400; AskNewswires@dowjones.com

(END) Dow Jones Newswires

November 10, 2020 14:29 ET (19:29 GMT)

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