Cannabis company Aurora Cannabis Inc (NYSE: ACB) (TSE: ACB) reported fiscal fourth-quarter results last week that looked “bad” on the surface, but look even worse when digging beyond the headline numbers, according to Stifel.

The Analyst

W. Andrew Carter downgraded Aurora’s Toronto-listed stock rating from Hold to Sell with a price target lowered from CA$7 ($5.29) to CA$5 ($3.78). 

Click here for more information about the upcoming Benzinga Cannabis Capital Conference Oct. 22-23 in Chicago.

The Thesis

Aurora’s shortfall in the quarter is evident due to a reported $20.1 million of bulk wholesale trim sales that are unlikely to repeat at the same level, Carter said in a Sunday downgrade note. (See his track record here.)

The headline net cannabis revenue of CA$94.7 million suggests a net cannabis revenue base closer to CA$75 million versus Stifel’s estimate of CA$92.5 million.

The “lower quality” performance marks a reversal from the company’s update in August, when it alluded to a strong in-market performance and a leadership position in Canada, the analyst said. 

Instead, the company recorded CA$44.9 million in adult use sales in Canada, which implies that it lags Canopy Growth Corp (NYSE: CGC), which reported CA$49 million in adult use sales, including a CA$6.5-million charge for potential returns, he said. 

Aurora’s report suggests it is far removed from achieving profitability, and any sequential improvement in the reported quarter was “underwhelming” when considering unique events, like a CA$14.9-million benefit from accounting changes, Carter said. 

Looking forward, the analyst said he expects a “more muted” adult use market in the first half of 2020 and sees a likelihood of Aurora’s sales hitting a plateau in the near-term.

Sales are likely to accelerate in the back half of the year from “Cannabis 2.0,” but the Stifel is moving its full-year revenue target lower from CA$600 million to CA$485 million.

The EBITDA loss for fiscal 2020 was also revised from CA$32 million to a loss of CA$89 million.

The company is likely need to oversee a “significant” capital market raise before the end of the first quarter of 2020 and will ultimately find itself in a difficult

Kroger Co (NYSE: KR) reported second-quarter results that came in better than expected. The earnings beat may have been overshadowed by management’s decision to remove its prior guidance of $400 million in incremental EBIT by fiscal 2021.

Q2 A Mix Of Positives And Negatives

Kroger’s headline numbers “looked fine” as identical store (ID) sales excluding fuel of 2.2% was the best seen since early 2016, Morgan Stanley analyst Simeon Gutman wrote in a note. Gross margins (ex-fuel) improved from down 40 basis points in the first quarter to down 30 basis points while EBIT margins (ex-fuel) contracted just 20 basis points versus a 55 basis point contraction in the first quarter.

Gutman said Kroger’s improving metrics comes at a time when industry-wide sales and peer comps both improved and management acknowledged it didn’t gain any market share in the quarter.

Similarly, UBS analyst Michael Lasser said Kroger’s report includes a combination of “puts and takes.” On the positive side, the company’s ID growth came from a combination of store renovations, private label, higher than expected inflation, and digital. These headwinds appear to have carried over into the third quarter.

On the other hand, the pharmacy business continues to see “intense” pressures and the segment’s gross margins likely fell by up to 200 basis points. Kroger’s headwinds in the pharmacy segment could continue through the end of the year.

Related Link: Kroger’s Q1 Draws Tepid Reaction From Analysts, Investors Pull Back

No Debating At Credit Suisse

Kroger reported its “most compelling” earnings print in a while as ID sales came in north of 2% for the first time since 2016, Credit Suisse analyst Judah Frommer wrote in a note. Other key takeaways include 31% growth in digital sales and online buying is available to 95% of Kroger households. Also, private label sales rose 3.1% which is a record second quarter high.

“Continued confidence in robust free cash flow generation and a return to consistent share repurchase activity could lay the groundwork for improved own-ability of KR stock at peer-low valuation,” Frommer wrote in a note.

2020 And 2021 Outlook

Kroger kept its 2020 EPS guidance range unchanged at $2.15 to $2.25, Bank

Before 10 a.m E.T on Friday, 95 companies hit new 52-week lows.

Key Facts:

• Altria Group (NYSE: MO) was the biggest company on a market cap basis to set a new 52-week low.
• High Performance (OTC: TBEV) was the smallest, in terms of market cap, to set a new 52-week low
• Of the companies setting new 52-week lows, Strikepoint Gold (OTC: STKXF) underwent the biggest reversal. Shares of Strikepoint Gold actually traded up 48.0% to bounce back from its new 52-week low.

During the first half-hour of trading on Friday, the following stocks set new 52-week lows:

• Altria Group (NYSE: MO) stock set a new 52-week low of $42.39 on Friday morning, with shares later moving down 4.59%.
• Bank of America (OTC: BFALL) stock hit a new 52-week low of $24.89 to begin trading. The stock was down 0.56% on the session.
• Fairfax Financial Hldgs (OTC: FRFFF) shares hit a yearly low of $14.10 today morning. The stock was down 2.72% on the session.
• Capital One Financial (OTC: COFOL) shares fell to $24.62 on Friday morning, setting a new 52-week low. Shares then moved down 1.09%.
• ANGI Homeservices (NASDAQ: ANGI) stock set a new 52-week low of $7.62 on Friday morning, with shares later moving up 3.3%.
• Holly Energy Partners (NYSE: HEP) stock dropped to a yearly low on Friday morning of $26.15. Shares then traded down 2.76%.
• Unicaja Banco (OTC: UNJCF) shares fell to $0.80 on Friday morning, setting a new 52-week low. Shares then moved down 8.77%.
• PDL BioPharma (NASDAQ: PDLI) stock hit $2.21 on Friday morning, setting a new 52-week low. The stock traded down 5.27% over the course of the day.
• Giordano International (OTC: GRDZF) shares set a new yearly low of $0.30 this morning. The stock was down 0.66% on the session.
• Myovant Sciences (NYSE: MYOV) shares set a new 52-week low of $6.31 today morning. The stock traded down 4.47% over the session.
• Heska (NASDAQ: HSKA) stock moved up 2.28% over Friday’s trading session after setting a new 52-week low of $63.30 to open trading.
• Mammoth Energy Services (NASDAQ: TUSK)

Caliva, one of the largest vertically integrated cannabis companies in California, announced this week it has added a new board member, Jeffry R. Allen, and three new executive team members:

• Joseph Sequenzia, as Chief Marketing Officer
• Leann Taylor, as Chief Strategy Officer
• Drew Kornreich, as Chief Mergers & Acquisitions Officer

These new team members bring impressive and extensive experience in their respective fields, along with “a passion for providing ubiquitous access to the highest standards of plant-based solutions,” a company representative told Benzinga.

Caliva also counts on the support of billionaire rapper and entrepreneur Shawn “Jay-Z” Carter, who serves as chief brand strategist; an investment from Joe Montana’s Liquid 2 Ventures; and Carol Bartz, former CEO of Autodesk, Inc. (NASDAQ: ADSK) and Yahoo, who serves as Chairwoman of the Board.

About The New Team Members

Allen is the former Executive Vice President of Business Operations at NetApp Inc. (NASDAQ: NTAP) and will be integral in guiding Caliva’s fiscal responsibility and growth in his new role.

Sequenzia founded the advertising agency milk*. His previous experience includes working for brands like Pepsi, Nike (NYSE: NKE) and Starbucks (NASDAQ: SBUX).

Taylor brings more than two decades of expertise having previously served as Head of Investor Relations at Warner Music Group.

Korneich joins the leadership team after having spent his career in large-scale consolidations, mergers and acquisitions, corporate finance and private structured opportunistic transactions. He was also the Co-Founder, President and General Counsel of High Tower Holding, LLC, an independent wealth-management firm.

“Caliva has already established itself as a leader in this rapidly evolving legal cannabis market, with plans to enter new categories in 2020,” Sequenzia told Benzinga. “I look forward to working alongside the company’s impressive executive leadership team as we bring these unprecedented projects and partnerships to life. Together, I am confident we will continue to innovate in this ever-growing industry.”

Gainers

• T2 Biosystems, Inc. (NASDAQ: TTOO) shares jumped 82.5% to close at $2.61 on Wednesday after the company announced that it has been awarded a breakthrough technology contract with Premier. Premier’s members will receive special pricing and access to T2 Biosystems’ T2Bacteria Panel and T2Candida Panel.
• Yuma Energy, Inc. (NYSE: YUMA) shares climbed 64% to close at $2.9850 on Wednesday after the company announced a third-party has purchased all of the company’s outstanding senior secured bank debt and related liabilities for approximately $35 million.
• Francesca’s Holdings Corporation (NASDAQ: FRAN) gained 59.4% to close at $16.58 on Wednesday after climbing 101.55% on Tuesday.
• Lexicon Pharmaceuticals, Inc. (NASDAQ: LXRX) gained 27.9% to close at $2.20 after the company announced the termination of its alliance and settlement with Sanofi. Sanofi must pay the company $260 million.
• Bicycle Therapeutics plc (NASDAQ: BCYC) climbed 27.6% to close at $8.97.
• YRC Worldwide Inc. (NASDAQ: YRCW) rose 27.2% to close at $4.40 after reporting a new term loan agreement.
• Globalstar, Inc. (NYSE: GSAT) jumped 24.8% to close at $0.47 after the company announced that Charlie Ergen and his EchoStar firm have started a strategic partnership for the company’s debt refinancing program.
• J. C. Penney Company, Inc. (NYSE: JCP) gained 23.8% to close at $1.25 on seemingly no company-specific news. The stock is approaching a 3-month high on above-average volume.
• China Online Education Group (NYSE: COE) shares rose 23.6% to close at $7.27 following Q2 results and Q3 guidance.
• American Renal Associates Holdings, Inc. (NYSE: ARA) rose 23.3% to close at $13.49.
• CARBO Ceramics Inc. (NYSE: CRR) rose 23% to close at $2.57.
• Precision BioSciences, Inc. (NASDAQ: DTIL) surged 22% to close at $9.80.
• Libbey Inc. (NYSE: LBY) jumped 20.5% to close at $2.53.
• BioXcel Therapeutics, Inc. (NASDAQ: BTAI) rose 18.2% to close at $10.26.
• LiveXLive Media, Inc. (NASDAQ: LIVX) shares jumped 17.9% to close at $2.64.
• Outlook Therapeutics, Inc. (NASDAQ: OTLK) gained 16.5% to close at $1.77 after Ladenburg Thalmann initiated coverage on the stock with a Buy rating and announced a price target of $9 per share.
• Neovasc

Viavi Solutions Inc. (NASDAQ: VIAV) raised its first-quarter guidance Thursday and said its board of directors have authorized a stock repurchase program for up to $200 million of the company’s common stock through open market or private transactions before Sept. 30, 2021.

The company’s analyst day event is being held Thursday. 

For the fiscal first quarter of 2020 ending Sept. 28, Viavi raised its revenue guidance from a range of $273 million to $293 million to a range of $282 million to $294 million; and raised its non-GAAP earnings per share guidance from a range of 14-16 cents to a range of 15-17 cents. 

The stock repurchase program replaces a previous $200-million stock repurchase program announced by the company that was set to expire Sept. 30, under which approximately $148.6 million in shares were repurchased as of Wednesday. 

Viavi shares were trading higher by 1% at $15 in Thursday’s premarket session. The stock has a 52-week high of $15 and a 52-week low of $9.17.

Related Links:

Viavi Solutions Holds 5G Opportunity, Says Bullish Rosenblatt

Zscaler Down 20% On Lower EPS Guidance

Photo courtesy of Viavi. 

European stocks and the related exchange traded funds haven’t been all that bad this year, but when measure against their U.S. counterparts, the picture grows murkier. Year-to-date, the iShares MSCI Eurozone ETF (CBOE: EZU) is up 14.4%, trailing the S&P 500 by nearly 700 basis points.

Eurozone stocks can take some steps toward shedding their laggard status today on the back of the European Central Bank meeting.

The ECB cut the interest rate on deposits by 10 basis points to 0.5% Thursday and said it would relaunch quantitative easing. 

The risk is that banks in the region will be pinched, a consideration for investors because many eurozone ETFs are heavy on the financial services sector.

“While the ECB’s strategy is to boost growth and inflation by lowering borrowing costs for companies and households, squeezing banks too much could hamper their ability to supply the credit that fuels the economy,” according to Bloomberg.

In addition to the aforementioned EZU, here are some Europe ETFs to consider today and over the remainder of 2019.

WisdomTree Europe Hedged Equity Fund

The WisdomTree Europe Hedged Equity Fund (NYSE: HEDJ) accomplishes two primary goals. First, it exploits weakness in the euro via its currency hedge. Second, its financial services weight is just 11.73%, making that sector merely the fifth-largest in the fund. Additionally, HEDJ is proof positive that there are opportunities in eurozone stocks as this WisdomTree has performed inline with the S&P 500 this year.

“It took less than a generation to balloon the ECB’s balance sheet from below 1 trillion euros to 4.69 trillion euros ($5.19 trillion) via bond purchases. How big of a dent can the ECB make in equities? This isn’t the $24-trillion S&P 500; the MSCI EMU Index is worth only 3.77 trillion euros ($4.18 trillion),” according to WisdomTree.

SPDR EURO STOXX 50 ETF

The SPDR EURO STOXX 50 ETF (NYSE: FEZ) tracks the EURO STOXX 50 Index.

That index “captures approximately 60% of the free-float market capitalization of the EURO STOXX Total Market Index, which in turn covers approximately 95% of the free float market capitalization of the represented countries,” according to State Street.

FEZ is a concentrated ETF — it really

There have been plenty of headlines in the digital payments space of late, and one analyst has adjusted his ratings on two of the leading payments stocks.

The Analyst

Canaccord Genuity analyst Joseph Vafi downgraded Square Inc (NYSE: SQ) from Buy to Hold and lowered his price target from $88 to $64.

Vafi also upgraded Paypal Holdings Inc (NASDAQ: PYPL) from Hold to Buy and raised his price target from $110 to $118.

The Thesis

Vafi said Square has done an impressive job in creating some of the best payment products available today, but competition could keep Square’s valuation in check. He said Square is further along than any other payments company is creating what he calls a “virtuous payments circle ecosystem” in which funds get cycled through its ecosystem repeatedly, generating transaction fees along the way.

At the same time, he said the recent consolidation wave in payments has created unprecedented competition, and Square will need to demonstrate more consistent payment volume growth and more momentum in the Cash App to warrant a more premium market valuation.

On the other hand, Vafi said the pullback in PayPal is a buying opportunity given the company’s impressive growth numbers at such a large scale. In addition, he said the recent guidance cut has eliminated most of the near-term risk.

“Net net, with the pullback in the stock post last quarter’s results, we see positive risk/reward in PYPL shares currently,” he wrote in the note.

Benzinga’s Take

The payments space is well-positioned for secular long-term growth, but increasing competition and lofty valuations are both near-term concerns. Square may ultimately provide the most upside, but PayPal appears to be the safer play at the moment based on Cannacord’s analysis.

Do you agree with this take? Email feedback@benzinga.com with your thoughts.

Related Links:

Bank Of America Cuts Square Target Due To Questions About 2020 Guidance

JPMorgan Challenges Stripe, Square With Free Same-Day WePay Deposits

• Citigroup raised Public Storage (NYSE: PSA) price target from $223 to $250. Public Storage shares closed at $250.00 on Tuesday.
• Wells Fargo boosted Micron Technology, Inc. (NASDAQ: MU) price target from $50 to $60. Micron shares closed at $49.39 on Tuesday.
• Bank of America lifted Apple Inc. (NASDAQ: AAPL) price target from $240 to $250. Apple shares closed at $216.70 on Tuesday.
• UBS lowered the price target for L Brands Inc (NYSE: LB) from $24 to $19. L Brands shares closed at $18.55 on Tuesday.
• Stifel raised the price target for Restoration Hardware Holdings, Inc (NYSE: RH) from $153 to $196. RH shares closed at $158.88 on Tuesday.
• Benchmark cut the price target on GameStop Corp. (NYSE: GME) from $5 to $3. GameStop shares closed at $5.09 on Tuesday.
• Wedbush lowered the price target for Zscaler Inc. (NASDAQ: ZS) from $90 to $80. Zscaler shares closed at $61.60 on Tuesday.
• Baird cut the price target for HD Supply Holdings Inc (NASDAQ: HDS) from $50 to $40. HD Supply shares closed at $39.10 on Tuesday.
• Nomura raised the price target for Synchrony Financial (NYSE: SYF) from $39 to $43. Synchrony Financial shares closed at $33.80 on Tuesday.
• Oppenheimer boosted the price target on Costco Wholesale Corporation (NASDAQ: COST) from $295 to $300. Costco closed at $297.00 on Tuesday.

GameStop Corp. (NYSE: GME) continues to have a difficult year after reporting a second-quarter earnings miss Tuesday. Here’s what the Street had to say. 

Credit Suisse: It May Get Worse Before It Gets Better

Credit Suisse analyst Seth Sigman said in a Wednesday note that the retailer still has plenty to prove, and it’s going to take more than a new cycle of new consoles from Playstation and Xbox.

With the company’s strategic cost-cutting initiatives underway, the analyst said he appreciates the new focus, but said results may still get worse before they get better.

“It’s difficult to envision any major profit improvement in 2020,” he said. 

Credit Suisse maintained an Underperform rating on GameStop and lowered its price target from $6.50 to $6.

BofA: Limited Turnaround Opportunity 

Bank of America Merrill Lynch analyst Curtis Nagle said in a Tuesday note that, with EBIT declining 50% year-over-year and most issues affecting the company being out of its control, “there is very limited scope and time to stage a turnaround.”

The analyst maintained an Underperform rating with a $2.50 price target.

Benchmark: GameStop ‘Will Be Dislocated’ 

Benchmark analyst Mike Hickey said in a Wednesday note that he expects continued cost-cutting and store closures in the near future as the company strains from the ongoing shift to digital purchases.

“We believe the future of gaming is digital cloud-based delivery, an opportunity where GME will be dislocated. We do not expect investor sentiment for GameStop to improve, and we believe questionable valuations on current fundamentals are inherently flawed,” the analyst said. 

GameStop’s new management team appears detached from emerging digital trends, and the idea that GameStop will emerge as a social and cultural gaming hub is highly unlikely, he said. 

Benchmark maintained a Sell rating and lowered the price target from $5 to $3.

Wedbush Sees Positive FCF Trend

Wedbush analyst Michael Pachter has a contrarian bullish view on GameStop, and said in a Wednesday note that he expects shares to trade at a compressed EPS multiple until the company can slow the rate of decline in its core video game business.

“We continue to believe that GameStop is an attractive investment. The company expects to generate over $200 million in free