Aurora Cannabis May Miss Debt Covenants, Analysts Warn

The chorus of voices warning of risks to Aurora Cannabis Inc.’s balance sheet is growing louder. With a C$360 million loan coming due in August 2021, at least three analysts have cautioned that the pot company may be unable to meet the covenants on that debt, Bloomberg News reported. “With balance sheet risks to remain a core investment thesis in 2020 in our view, and lingering uncertainty especially on financial covenants, we struggle to envision a scenario where shares have sustainable support,” Bank of America analyst Christopher Carey said in a note published Friday. He downgraded Aurora to underperform from neutral and cut his 12-month price target to C$1.50 from C$4. Ultimately, Carey expects Aurora will be able to restructure the covenants, “a big step in helping investor confidence.” Read more

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