The cannabis sector has been trading mixed as Tilray (TLRY) has fallen more than 60% from last week’s highs. The pullback by Tilray is not surprising as it follows a massive rally and we are keeping an eye on how the shares continue to trade.

Although Tilray has been frequently covered by mainstream financial media, the two cannabis companies highlighted below have received significant upgrades from major broker-dealers earlier this week.

Canopy Growth Rallies After Benchmark Issues a $100 Price Target

Canopy Growth (WEED.TO) (CGC) recorded mixed movements and came off its highs of the day after broker-dealer Benchmark initiated coverage on the Canadian cannabis producer with a Buy rating and a $100 price target.

This is the highest price target issued to Canopy Growth and we are monitoring how the shares trade from here. The brokerage firm believes that the vertically integrated Canopy Growth is an early leader in the rapidly growing Canadian cannabis market and is poised to benefit from the legalization of recreational cannabis use in the country.

Benchmark believes that Canopy has an early mover advantage when it comes to creating leading cannabis brands and products. The broker also said that the Canadian cannabis producer is well-positioned to take a meaningful share of the potentially massive international cannabis market.

Benchmark called Constellation Brands’ (STZ) $4 billion investment a game changer which will allow the company to build out its global distribution, production and retail infrastructure either internally or through mergers and acquisitions.

The $100 price target implies that there is almost 50% upside to current levels and we are favorable on the points raised by Benchmark. The Canadian cannabis company has been a leader in the Canadian and international cannabis market and we expect to see Canopy build upon this position in 2019.

Aurora Receives an Upgrade from Canaccord After Earnings

Yesterday, Aurora Cannabis (ACB.TO) (ACBFF) traded higher after reporting strong fourth-quarter financial results. During the quarter, Aurora Cannabis recorded $79.3 million in net income on $19.1 million in revenue.

This growth was impressive and Aurora attributed the increase in revenue to higher patient numbers following the acquisition of CanniMed, increased product availability through scale up of operations and the CanniMed acquisition, an increase in the average net selling price of dried cannabis, development of international markets, and product diversification.

We are favorable on these numbers and believe that Aurora Cannabis is well positioned to capitalize on the recreational cannabis market in Canada and the global medical cannabis opportunity.

After the market closed, Canaccord Genuity raised its price target on the Canadian cannabis producer to $13 from $11. We are monitoring how the market responds to this upgrade and will be keeping an eye on this one.