Is it time to dump your Tilray stock?

Haywood Capital Markets said on Jan. 9 that it has lowered its target price on Tilray Brands (Tilray Brands Stock Quote, Chart, News, Analysts, Financials TSX:TLRY) to $10.50 from $18.00 while maintaining a Hold rating, following the company’s fiscal second-quarter 2026 results, which came in broadly in line with expectations but reflected margin pressure from revenue mix.

Tilray reported fiscal Q2 2026 results for the period ended Nov. 30, 2025, with net revenue of $217.5-million and Adjusted EBITDA of $8.4-million. That compared with Haywood’s estimates of $214.3-million in revenue and $7.4-million in Adjusted EBITDA, and Street consensus of $211.2-million and $8.1-million, respectively. Revenue increased 3.1% year over year and 3.8% sequentially.

Haywood analyst Neal Gilmer said revenue growth versus the prior year was driven by a modest increase in adult-use cannabis sales and a jump in lower-margin distribution revenues, which weighed on profitability. Company-wide adjusted gross margin came in at 26.4%, below Haywood’s 28.6% estimate and down from 29.7% a year earlier.

“Tilray’s efforts toward cost containment and operational efficiency led to EBITDA in-line with our forecast,” Gilmer said, noting that expense reductions helped offset the margin pressure.

Tilray’s beverage and alcohol segment posted a 20.6% year-over-year revenue decline, reflecting continued headwinds in the craft beer market and portfolio optimization under Project 420. Adjusted gross margin in the segment fell to 31.4% from 42.1% last year, largely due to lower volumes. Management reiterated that it remains on track to achieve $33-million in total annual savings from Project 420.

In cannabis, net revenue rose 2.9% year over year to $67.5-million, supported by stronger international sales and a modest increase in adult-use volumes. Medical cannabis sales were flat, while wholesale revenue declined, consistent with the segment’s typically lumpy nature.

Tilray reiterated its fiscal 2026 guidance for Adjusted EBITDA of $62-million to $72-million, implying growth of 13% to 31% over fiscal 2025. Haywood made only minor changes to its forecasts, raising its revenue outlook slightly while keeping its fiscal 2026 EBITDA estimate toward the lower end of the guidance range.

Gilmer said recent enthusiasm around potential U.S. federal reform has faded, with investor skepticism returning and the share price drifting back toward prior levels. As a result, Haywood reduced its valuation multiple to 1.4x EV/revenue on fiscal 2027 estimates, down from 2.5x previously, discounted at 15%.

Haywood forecasts Tilray will generate Adjusted EBITDA of $61.8-million on revenue of $863.6-million in fiscal 2026, improving to $69.0-million of Adjusted EBITDA on revenue of $910.7-million in fiscal 2027.

The firm said it continues to view Tilray as a prominent diversified player with long-term optionality tied to international cannabis and U.S. beverage exposure, but remains cautious on near-term organic growth and cash flow visibility, underpinning its Hold recommendation.

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