SNDL Stock News: Sundial Growers drops back below 30 cents again

NASDAQ: SNDL gained 2.89% during Wednesday’s trading session.
Tough times hit the cannabis sector as Hexo reveals mass layoffs.
More stock downgrades from analysts as Tilray gets hit hard.

Stocks Reporter FXStreet

UPDATE: A day after reclaiming the $0.30 level, Sundial Growers stock is once again losing its grip. Half an hour after the open, SNDL shares are now down 3.1% to $0.2932. That is actually not so bad compared to the overall market. At the same time the small-cap Russell 2000 is down 3.4%, while the growth heavy Nasdaq Composite has given up 3.7%. One day after the market was exuberant following the Federal Reserve's announced 75 basis point raise in the Fed funds rate, markets are once again taking the short to medium term into account. They were excited that the Fed was bringing a gun to the inflation fight rather than a knife, which should mean that the inflation-induced market crash will end sooner rather than later. Now it has dawned on everyone that raising interest rates fast will hurt the most vulnerable companies and probably induce a full-on recession. The bull market will not resume until inflation is crushed and interest rates stop climbing.

NASDAQ: SNDL snapped its recent five-day losing streak as the cannabis sector saw some reprieve from its ongoing downward spiral. On Wednesday, shares of SNDL gained 2.89% and closed the trading session at $0.30. It was a momentous day for the US markets as the FOMC announced a 75 basis point hike to the interest rates, the largest such raise since 1994. All three major averages rose higher following the announcement for the first positive day of the week. The Dow Jones gained 303 basis points, while the S&P 500 and NASDAQ rose by 1.46% and 2.50% respectively during the session.

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The tough economic environment is hitting companies in the Canadian cannabis industry. A day after announcing a restructuring of its deal to sell a stake in its company to Tilray (NASDAQ: TLRY), Hexo (NASDAQ: HEXO) announced its own corporate restructuring that would see 450 staff being laid off. It is also being forced to close a production facility in Ontario. Hexo claims that the cuts will allow the company to save more than $30 million in costs on an annual basis. Shares of Hexo lost a further 6.06% on Wednesday.

Sundial stock forecast

The other half of that deal with Hexo received a couple of downgrades from Wall Street analysts on Wednesday. Piper Sandler cut its price target for TIlray in half to $3.00 while maintaining a Neutral rating for the stock, while Canaccord lowered the price target to $7.00 and still maintained its Buy rating. According to TipRanks, out of the nine analysts that cover Tilray only one has a Buy rating, seven have a Hold rating, and one has a Sell rating. Shares of TLRY were up by 1.27% on Wednesday.

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