OGI Maintained at Buy at Stifel GMP Following Q2 ResultsOrganigram Holdings Maintained at Buy at Stifel GMP Following Q2 Results; Price Target Raised to C$4.00 2023-07-17 11:24:28 AM ET (MT Newswires)
11:24 AM EDT, 07/17/2023 (MT Newswires) -- Stifel GMP on Monday reiterated its buy rating on the shares of Organigram Holdings (OGI.TO) while boosting its price target to C$4.00 from C$1.25 after the cannabis producer reported weaker than expected second-quarter results.
"OGI reported Q3FY23 results below our street-low forecasts and reversed a three-consecutive quarter trend of positive consolidated adj. EBITDA," analyst Andrew Partheniou wrote. "Delayed shipments of high-margin international sales, a ~30bps REC market share loss QoQ as per Headset and a temporary decline in production yields weighed on results while OGI continued to navigate a persistent price war. Rather than participating in irrational behavior and consumer deception with regards to THC potency, OGI is choosing innovation with its prerolls segment gaining traction, the highest number of new SKUs rolled out in a quarter and upcoming launches in minor cannabinoids as well as new vape technology. Matched with an expected resumption of international shipments in the coming months and a rebound in yields already realized, OGI guided to positive adj. EBITDA (excl. R&D expenses) next quarter and reiterated its positive FCF guidance for end of CY23. Hence, we believe our thesis remains intact.