Top cannabis analysts share why they’re bullish on these two stocks
Joe Biden was inaugurated as the 46th president just two weeks after the Democrats locked out control of the Senate with wins in both Georgia Senate runoffs. These events put the Dems in control of both Congress Houses and the White House. While their margins in Congress are tight – the tightest in the Senate, where new Vice President Kamala Harris has to cast votes in a 50:50 chamber – the Democrats have the votes needed to get their legislative agenda through. Part of that agenda is federal cannabis legislation. Don’t expect this to happen right away as Congress and President Biden will have many other priorities that need to be addressed first. But New York Governor Andrew Cuomo, a leader in the progressive Democratic wing, promised state-level legalization in his speech on the state – and like California, New York tends to be a trendsetter. Additionally, Biden has selected federal judge Merrick Garland as his election to head the Department of Justice. Garland is generally viewed as centrist, but he has a judicial record from the Bundesbank on compliance with state cannabis legalization regulations. “[With] Stock valuations will continue to rise, we remain bullish on U.S. cannabis and believe 2021 will be a pivotal year for the industry. We believe that investors will increasingly benefit from a better overview of company-specific growth rates and operational metrics through 2021. We are also looking for a continuation of government 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 that are backed by leading cannabis analysts. These names have received sufficient support from the analyst community to earn a consensus rating of “Strong Buy”. Aphria, Inc. (APHA) Headquartered in Leamington, Ontario, Aphria is one of the giants of the legal cannabis sector in Canada. The company has a market capitalization of more than CA $ 4 billion and reported over CA $ 160.5 million for the last fiscal quarter, up 33% year over year. That number was a company record. The company announced in December a merger and acquisition agreement with rival Tilray to create the world’s largest cannabis company, valued at CA $ 5 billion. The agreement provides that all Aphria shareholders will receive 0.8381 Tilray shares. The merged company will operate under the TLRY stock market ticker after the move is complete. Meanwhile, investors can take comfort in Aphria’s stock growth. The stock is up 124% over the past 52 weeks. A significant portion of that profit has been made in the five weeks since the Tilray deal was announced. APHA shares have appreciated 58% during this time. Aphria has caught the attention of 5-star Cantor analyst Pablo Zunaic, who believes the company’s outlook “[all] about what APHA + TLRY can do in a rapidly deregulating cannabis world. “Zunaic added:” The leading Canadian company (16% APHA share plus 4% TLRY share) with an emerging international unit (export to Israel, Germany, Poland, Malta; production in Germany / Portugal; German distribution) as well as additional Assets This can be useful depending on the form of future deregulation and should deserve a premium… ”Consistent with these comments, the analyst rates APHA as overweight (ie buy) and its price target of CA $ 26 implies an upside potential of 59% over current Level . (To view Zunaic’s track record, click here.) Zunaic isn’t the only analyst optimistic about Aphria. The company has 10 recent ratings and a breakdown of 8 buys versus 2 holds, making the analyst consensus a strong buy. However, the stock’s recent appreciation has pushed the trading price above the average target price of CA $ 15.09. APHA stock is now priced at CA $ 16.32. (See APHA stock 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 is headquartered in Florida, the third largest state in the country by population, where it has a 51% market share in the medical cannabis sector. The rapid growth of medical cannabis has resulted in a huge surge in Trulieve’s stock price over the past year. Trulieve stock is up an impressive 296% over the past 12 months. Medical cannabis is a profitable and growing market, and Trulieve’s revenues reflect that. The company has seen steadily increasing sales over the past two years. The latest quarterly report, the third quarter of 20, shows $ 136.3 million, a company record and a profit of 13% from the previous quarter. Summing up an optimistic case about Trulieve, Matt McGinley, 5-star analyst from Needham, notes, “While our fundamental outlook for the industry and this company didn’t change much in ’21, the outlook for federal reforms has changed as well as improves the prospects for funding. This growth is based on recent capital market activity. For this reason, we believe that multipliers are valued higher to more appropriately reflect the industry’s high growth rate. “Unsurprisingly, the analyst rates TCNNF as outperforming (i.e. buying) and setting a price target of $ 60.50, which suggests the stock will grow ~ 38% over the next 12 months. (To see McGinley’s track record, click here.) Strong Buy analysts’ consensus rating on this stock shows Wall Street approves of Trulieve’s worth. The rating is based on 6 unanimous purchase ratings. The average price target of USD 49.49 indicates an upward movement of ~ 13% compared to the current trading price of USD 43.93. (See Trulieve stock analysis on TipRanks.) To find great ideas for trading cannabis stocks at attractive valuations, visit TipRanks ‘Best Stocks to Buy, a newly launched tool that brings together all of TipRanks’ stock insights. Disclaimer: The opinions expressed in this article are solely those of the analysts presented. The content is intended to be used for informational purposes only. It is very important that you do your own analysis before making any investment.