Globe says Chu begins coverage on Valens with a "buy" 2019-11-08 04:47 PT - In the News
The Globe and Mail reports in its Friday edition that Desjardins Securities analyst John Chu commenced coverage on Valens Groworks with a "buy" rating and $8 share target, which is 45 below the consensus. The Globe's David Leeder writes that Mr. Chu says Valens is "setting the gold standard for extraction and beyond." Mr. Chu says Valens is an extraction company he feels is poised to benefit from the transition to Cannabis 2.0. Mr. Chu says: "As investor fatigue sets in on the cultivation segment, we introduce the extraction segment as a means of gaining exposure to the fast-growing cannabis sector, which we believe also offers lower risk. Extraction companies offer better sales visibility, limited downside margin risk and a faster path to positive EBITDA compared with the cultivation segment." Mr. Chu says: "With a growing focus on testing, formulations and product development, [Valens] is looking to be a partner with its customers in the CPG world. As a result, it has partnered with industry-leading players to build a unique and diverse portfolio of IP and technology that, along with its expertise with multiple extraction methods, can be leveraged into product development and white labelling service."