Investors who bought stocks during the COVID-19 market crash in 2020 have generally experienced some big gains in the past two years. But there is no question some big-name stocks performed better than others since the pandemic bottom.
Canopy’s Bumpy Ride: One company that has been a disappointing investment in the past two years has been Canadian cannabis giant Canopy Growth Corp CGC.
Canopy battled a difficult Canadian cannabis market throughout 2020. The biggest headline of 2020 for Canopy was the addition of former Constellation Brands, Inc. STZ CFO David Klein as the new CEO of Canopy. Canopy also modified its conditional buyout agreement with U.S. multi-state cannabis operator Acreage Holdings Inc ACRHF in June 2020.
At the beginning of 2020, Canopy shares were trading at around $21.50. By the beginning of March, the stock was down to $18.97 after news of the coronavirus spreading in China prompted concerns about a U.S. pandemic.
Canopy bottomed at $9 during the pandemic-driven March sell-off. By May, Canopy shares made it back up to $22.19, but the rally stalled at that point until the November presidential election.
A victory by Democrat Joe Biden in November 2020 and a surprise blue wave giving Democrats control of both the Senate and House sent cannabis stocks soaring on optimism that U.S. cannabis legalization may be just around the corner.
Canopy In 2021, Beyond: The stock ultimately peaked at $56.50 in February 2021 during a retail investor-fueled short squeeze. Unfortunately, Canopy broke below its March 2020 lows in December 2021 and ultimately hit $5.62 in March 2022, its low point since the beginning of the pandemic. The stock has since rebounded to $6.56, but it has been a horrible investment over the past two years.
Investors who bought Canopy on the day it hit its 2020 pandemic low and held on have now generated a negative return on their investment. In fact, $1,000 in Canopy stock bought on March 18, 2020, would be worth about $689 today.
Looking ahead, analysts are expecting Canopy stock to continue to struggle in the next 12 months. The average price target among the 15 analysts covering the stock is $7.10, suggesting only 7.4% upside from current levels.