February 25, 2019 / 12:48 PM / 8 months ago

BUZZ-Cronos Group: Drops after Jefferies starts with "underperform"

** U.S.-listed shares of Cronos Group Inc down 3.5 pct at $21.15 premarket

** Jefferies starts coverage of the weed co’s Toronto-listed stock with an “underperform” rating

** The market has gotten ahead of itself, says Jefferies, adding there is little to get really excited about the stock other than the investment and large sum of money from Altria

** Altria Group Inc, the maker of Marlboro cigarettes, announced a ~$1.8 bln investment in CRON in December, leading to it holding a ~45 pct stake in the Canadian cannabis producer

** Up to Friday’s close, CRON’s Toronto stock has more than doubled from the level it was at before the announcement

** “We also question when Altria value creation will begin to materialise, especially as there appears little near-term appetite to put the Altria money to work” - Jefferies

** Jefferies has been kinder to CRON’s peers, starting coverage of OrganiGram and Aurora Cannabis with “buy” ratings

** 4 of 7 brokerages rate the Toronto-listed stock of Cronos “buy” or higher, 2 “hold” and 1 “strong sell”; their median PT is C$17 - Refinitiv Eikon data

** Up to Friday’s close, the company’s U.S.-listed stock has more than doubled this year following a ~34.4 pct jump in 2018 (Reporting by Aaron Saldanha in Bengaluru)

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