Cronos Group Inc. (CRON) is one of the bigger pot stocks in the cannabis industry but this cannabis stock has been on a bit of wild ride for much of 2019. During the first three months of the year, the stock soared and doubled in value. However, it gave up most of its gains as investors moved away from the stock throughout April and May. In light of this, it seems that the stock has stabilized in June and has found some support at $14 level, according to experts. Cronos is definitely a marijuana stock to watch.
Analysts Are Positive
A significant trigger behind the impressive performance for the Cronos stock was a double upgrade to the stock by Christopher Carey, an analyst with Bank of America. In an important development, Carey upgraded the cannabis stock from ‘underperform’ to ‘buy’. He also revised his target price to $20 from $13. While Carey has given his verdict on Cronos, an analyst at Jeffries named Owen Bennett has stated that he prefers the prospects of a rival stock, Aphria. Bennett reckons that the Cronos stock is overvalued in comparison to other cannabis companies in the same industry.
That being said, it needs to be remembered that tobacco giant Altria owns 45% of Cronos. This investment has given Cronos a huge cash reserve of $1.8 billion. There are very few marijuana companies who can boast of such cash reserves. Altria wants Cronos to use that money in order to boost its market share and if they manage to do so, then the stock could have a good time as well. Cronos is looking to enter the CBD market soon and it remains among the fastest growing segments in the cannabis industry. However, experts believe that the company would do well to narrow its focus down to the United State. The US is the most lucrative cannabis and CBD market in the world after all. If Cronos can use its massive cash reserves to engineer an expansion into the CBD market in the U. S., then the rewards could be enormous. Researchers say the pot industry could be valued at $20 billion by 2024 and if Cronos can enter that market, then it could deliver great value to its investors.