The Globe and Mail reports in its Thursday edition that Canaccord analyst Matt Bottomley, following Hexo's "turbulent" fourth quarter, made "substantial" revisions to his financial expectations. The Globe's David Leeder writes that Mr. Bottomley says he was disappointed by the quarterly results. He cut Hexo to "hold" from "speculative buy." He trimmed his share target to $3.50 from $7. Analysts on average target the shares at $3.77. On Tuesday, Hexo posted revenue for the quarter of $15.4-million, which fell in line with its pre-released estimate from earlier in October (that fell 40 per cent lower than its original guidance). Mr. Bottomley says in a note: "Excluding contribution from Newstrike (which closed during the period), net revenues would have been relatively flat quarter-over-quarter. We find this surprising given that Q4/19 was also the company's first quarter of contribution from sales in Alberta, indicating overall lower sales in the company's legacy markets. The muted growth in the quarter was primarily a result of the SDQC requiring less than half of what it originally contracted with LPs in the first year of legalization due the slow roll out of provincially run retail stores in Quebec."
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