GrowGeneration Shares Rise Despite Stifel Bearish Call

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GrowGeneration Shares Rise Despite Stifel Bearish Call
Credit: © Reuters.

By Sam Boughedda — GrowGeneration Corp (NASDAQ: GRWG ) shares rose more than 5% heading into Friday's close despite a downgrade and price targets being lowered after its third-quarter earnings.

The company shares traded at $23.782

On Thursday morning, the company reported an earnings miss and revenue beat.

However, Stifel analyst Andrew Carter downgraded the stock to hold from buy, setting a price target of $24, down from $41. The analyst said that while he remains confident in the company's long-term growth potential, he miscalculated the effects of challenging category dynamics, input cost inflation, and the strain on the company's existing infrastructure. 

Carter added that he believes the company's softer fundamental performance in the near-term "will obscure the platform's long-term advantages, impeding sustained investor enthusiasm and leaving the shares range-bound."

Roth Capital reduced its price target on the stock to $35 from $40, maintaining a buy rating. In a research note, analyst Scott Fortune told investors that the slowing acquisitions mean he expects greenfield builds to be the majority of GrowGeneration's planned 15 to 20 retail openings. Fortune added that constraints from the ongoing supply-demand imbalance across West coast states will continue into 2022. 

Elsewhere the company's stock price target was lowered to $35 from $45 at Alliance Global Partners and to $44 from $50 at Lake Street.

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