ATB Capital In a research report titled Greenhouse Advantage, Green Light For Growth, ATB Capital Markets’ Frederico Gomes initiated coverage of B.C.-based Village Farms International Inc. with an “outperform” rating and US$3.50 target, below the US$6.03 average.
“VFF entered the Canadian cannabis market in 2018 and, supported by years of cultivation experience, is now one of the lowest-cost LPs in the country, ranking fourth in market share,” he said. “Produce still accounts for over 55 per cent of total sales, but VFF is focused on growing its cannabis segment while maintaining optionality to convert produce greenhouses into cannabis (in Canada and the US). We believe VFF will remain one of the leading LPs in Canada due to its low-cost advantage and that it will gain market share as it expands its brand and product portfolio. In our view, the current valuation is attractive, as the market neglects the real option value of U.S. THC expansion and the value of the legacy produce business.”