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Top Cannabis Analysts Explain Why They Are Bullish On These 2 Stocks
Joe Biden was inaugurated as the 46th president, just two weeks after Democrats locked down control of the Senate with wins in both senatorial polls in Georgia. These events give the Democrats control of both Houses of Congress and the White House. While their margins in Congress are narrow – as narrow as possible in the Senate, where new Vice President Kamala Harris will have to vote a tie in a 50-50 chamber – Democrats have the votes they need to move their legislative agenda forward. And part of that program is federal cannabis legislation. Don’t expect this to happen just yet, as Congress and President Biden will have plenty of other priorities to deal with first. But New York’s Governor Andrew Cuomo, a prominent politician on the Progressive Democrats wing, promised state-level legalization in his State of State speech – and like California, New York tends to be a trailblazer. Further, Biden chose Federal Judge Merrick Garland as his choice to head the Department of Justice; Garland is generally viewed as centrist, but he has a court record from the federal bench of complying with state-level cannabis legalization regimes. “[With] leeway for equity valuations to continue to rise, we remain bullish on U.S. cannabis and believe 2021 will be a pivotal year for the industry … We believe investors will increasingly benefit from a better visibility into company-specific growth rates and operational metrics through 2021 … We are also looking for continued state-led legalization initiatives, ”noted Jesse Pytlak of Cormark Securities. With that in mind, we used TipRanks’ database to take a closer look at two cannabis stocks backed by top cannabis analysts. These names received enough support from the analyst community to achieve a “Strong Buy” consensus rating. Aphria, Inc. (APHA) Based in Leamington, Ontario, Aphria is one of the giants of the legal cannabis industry in Canada. The company has a market capitalization of over C $ 4 billion and reported more than C $ 160.5 million in its most recent fiscal quarter, a 33% year-over-year gain. This figure was a corporate record. The company announced in December a merger and acquisition deal with competitor Tilray, a move that will create the world’s largest cannabis company, with a market value of C $ 5 billion. The deal will see all Aphria shareholders receive 0.8381 shares of Tilray. The merged entity will operate under the stock symbol TLRY when the move is complete. In the meantime, investors can be reassured by the growth in Aphria shares. The stock has risen 124% in the past 52 weeks. A significant portion of this gain occurred within 5 weeks of the announcement of the Tilray deal; APHA shares have appreciated 58% during this period. Aphria caught the attention of Cantor 5-star analyst Pablo Zunaic, who believes the company’s outlook is “[all] on what APHA + TLRY can do in a rapidly deregulating cannabis world. Zunaic added: “Leading Canadian company (16% APHA rec share plus TLRY 4% share), with nascent international unit (exporting to Israel, Germany, Poland, Malta; production in Germany / Portugal; owned) to a German distribution), plus ancillary assets which may be useful depending on the form of future deregulation, should deserve a premium… ”Consistent with these comments, the analyst rates APHA an overweight (ie buy) , and its C $ 26 price target implies a potential upside of 59% from current levels. . (To see Zunaic’s track record, click here) Zunaic isn’t the only optimistic analyst on Aphria. The company has published 10 recent reviews, and their split is 8 buys versus 2 holds, making the analyst consensus a strong buy. However, the recent appreciation of the stock has pushed the price above the average price target of C $ 15.09; APHA shares are now priced at C $ 16.32. (See APHA stock market analysis on TipRanks) Trulieve Cannabis (TCNNF) Trulieve is a $ 5.23 billion medical cannabis company, operating in California, Connecticut, Florida, Massachusetts, Pennsylvania and West Virginia . The company’s headquarters are in Florida, the country’s third largest state in terms of population, where it has a 51% market share in the medical cannabis industry. The rapid growth of medical cannabis has fueled tremendous growth in the Trulieve share price over the past year. Trulieve shares have gained an impressive 296% over the past 12 months. Medical cannabis is a profitable and growing market, and Trulieve’s revenues reflect this. The company has reported steadily increasing revenue over the past two years, with the latest quarterly report, 3Q20, posting $ 136.3 million, a company record and gaining 13% from a quarter to quarter. Matt McGinley, 5-star Needham analyst, sums up a bullish case on Trulieve, noting: “While our fundamental outlook for the industry and this company has not changed significantly in the year 21, the outlook for federal reforms has improved, all as the outlook for funding this growth based on recent financial market activity. As such, we believe that the multiples will be reassessed higher to better reflect the sector’s high growth rate. Unsurprisingly, the analyst attributes TCNNF to an outperformance (ie a buy) and sets a price target of $ 60.50, which suggests that the stock will rise by around 38% over price. the next 12 months. (To watch McGinley’s history, click here) Strong Buy analysts’ consensus rating on this stock shows Wall Street agrees on Trulieve’s value. The rating is based on 6 unanimous purchase notices. The average price target of $ 49.49 suggests an increase of about 13% from the current price of $ 43.93. (See Trulieve’s Stock Analysis on TipRanks) To find great ideas for cannabis stocks traded at attractive valuations, visit Top Stocks to Buy from TipRanks, a newly launched tool that brings together all the information about stocks from TipRanks. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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