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Market Fades Cronos Group Inc. (CRON) After Underwhelming Earnings and Multiple Downgrades

Cronos Group Inc. $CRON has been consolidating after a choppy bullish run up in 2018 followed by another bull swing in January 2019. Recently, we noted that price action looked "toppy".

Cronos Group Inc, (CRON) Looks "Toppy" (3/25)

We noted that if price broke below $18.80 it would complete a price top and signal a period of bearish correction.

Cronos CRON, -1.65%  posted a net loss of C$11.8 million ($8.8 million), or 6 cents a share, for the fourth quarter, after earnings of C$667,000, or a penny a share, in the year-earlier period. Revenue came to C$5.6 million, up from C$1.6 million. The two analysts that provided estimates to FactSet were expecting a loss of 1 cent and revenue of C$10.4 million.

From Cronos’ (CRON) stock moves lower after reporting earnings (ETF Daily News)

Seeking Alpha also reported several downgrades:

  • PI Financial's Jason Zandberg cuts to Neutral from Buy. Cormark's Jesse Pytlak downgrades to Market Perform from Speculative Buy.
  • And one middle-of-the-roaders turn bear:
  • Canaccord's Matt Bottomley downgrades to Sell from Hold, noting a perky valuation and a "soft start" to Canada's adult-use market.
  • There's one bull boosting his target ... CIBC's John Zamparo acknowledges the "underwhelming" Q4, but isn't too concerned, instead noting "numerous positive catalysts" - U.S. banking reform, possible legalization in Israel, and strategic M&A among them. He lifts his PT to C$30 from C$22.

...

From Cronos Group -4% after 3 post-earnings downgrades (Seeking Alpha)


CRON Daily Chart

(click to enlarge)

Next Support:
- If price does close below $18.80 this week, I think we can anticipate further slide towards the $14-$15 area. 
- I think the most aggressive bearish outlook for now would be the $12 area, right around the 200-day simple moving average (SMA). 

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