Sundial Growers stock rises, ChemoCentryx soars as Home Depot & Lowe's shares slip

Yahoo Finance’s Emily McCormick reports on the day's trending tickers.

Video transcript

JARED BLIKRE: And now we want to get a check of some of the trending tickers on our site. And for that, we're going to bring in Yahoo Finance's Emily McCormick. And Emily, I know you're tracking Sundial Growers today. I think they just made an acquisition in the liquor and cannabis space. Can you tell us about that?

EMILY MCCORMICK: That's right, Jared. And we have seen Sundial Growers stock one of the top trending tickers on the Yahoo Finance website and app all day today. It's also been a meme stock, one of those Reddit Wall Street Bets favorites over the past couple of months as well. But it does have some positive corporate news that it's trading on this afternoon. Now, namely, Sundial Growers did announce that it agreed to purchase Alcanna, which is a Canadian pot and liquor retailer, for the equivalent of about $276 million US in an all-stock transaction.

Now, this is potentially a lucrative deal here for Sundial and expanding its retail footprint. Alcanna is Canada's largest private liquor retailer and has about 171 in-person locations. Now, some Wall Street analysts also struck an upbeat tone on this deal. CIBC analyst John Zamparo wrote a note that this agreement, quote, "comes as somewhat of a surprise, but the business is a strategic fit with Sundial's existing retail platform, particularly in cannabis and acquisitive nature."

I should note that Sundial shares are up nearly 50% so far for the year to date. Most of that spike came earlier this year amid that initial meme stock frenzy, though we should also note that shares of Sundial are still down about 4 and 1/2% today, even with today's jump. Jared.

JARED BLIKRE: And Emily, you're tracking another company that I have to admit, I hadn't heard of, but Chemocentryx. I'm looking at the chart here, up 87%, so the highest level since, it looks like, May. What's the story behind this move?

EMILY MCCORMICK: Well, that's right, Jared. I mean, this is one of those smaller biopharmaceutical stocks. We often see these companies trading with large moves to the upside or downside, based on their clinical trials data, as well as any FDA approvals of their drugs. And this is exactly what we're seeing here for Chemocentryx. Now, the company announced this morning that the FDA approved its drug called TAVNEOS. And it's a treatment for the autoimmune disorder ANCA-associated vasculitis.

Now, Chemocentryx also said that it expects a decision on this drug from European regulators by the end of this year. Of course, the fact that the FDA did give the approval and the green light to this serving as a sort of a positive indicator on that front as well and definitely a positive surprise here for this company to have this drug on the market with FDA approval.

And in the wake of this announcement, we also had the Wall Street firm Piper Sandler raising their recommendation on this stock to overweight from neutral and again, that really helping add to this positive sentiment today. And you could see here, just looking at this one-day session, we do have that stock up nearly 88% this afternoon, Jared.

JARED BLIKRE: Yeah, pretty big jump there. But two stocks that are not feeling the love today, Home Depot and Lowe's, each off about less than 1% here. But that's on a downgrade by Loop Capital. What's their reasoning there?

EMILY MCCORMICK: Well, Jared, of course, this is something that we've been watching for a number of companies here. But Loop Capital highlighting that Home Depot and Lowe's are likely to be particularly exposed to some of these cost concerns because of supply chain constraints that we're seeing across the economy, as well as higher material costs.

Now, Loop Capital downgrading both of these companies in a new note today. And specifically, analyst Laura Champine writing in her own words that, quote, the environment overall seems more fraught with risk than it was even three months ago for both Home Depot and Lowe's. So, specifically, we do have Loop Capital now with a rating of hold on Home Depot. She also slashed her price target on the stock by $45 to $325 per share. And she also downgraded Lowe's to a hold with a $220 price target.

Now, we are going to be getting the start of third quarter earnings season, of course, next week. That's really going to be giving some indications here about how companies across industries are handling this higher inflation and these supply chain disruptions we've been seeing over the past couple of months. But at least from Loop Capital's perspective, Home Depot and Lowe's two companies particularly exposed to some of these risks. Jared.

JARED BLIKRE: Indeed they are. Thank you for that, Yahoo Finance's Emily McCormick.