GLOBE & MAIL : Analyst raised Price Target to $3.15Mr. Maruoka raised his target price for shares of Aurora Cannabis Inc.(ACB-X).
“Shares of Aurora were stronger than we had expected following the expiry of the lockup on Dec. 10, and have now been bolstered by the task force report,” he said. “With the pathway to legalization now that much clearer, we believe that investors should now see significantly less risk to the implementation of the recreational market. We would remain buyers of the stock ahead of the receipt of Aurora’s license to sell oils and significant industry catalysts expected in the first half of next year.”
Mr. Maruoka said he expects near-term competition for the sector’s companies, including Aurora, to remain limited. He said: “The resources Health Canada dedicates to licensing will remain limited in the near term. We believe the government remains concerned that supply not outstrip demand, and so existing licensed producers should continue to enjoy a substantial first-mover advantage.”
“While distribution will likely remain the purview of the provinces (and is still largely undecided, in our view), the Task Force did make recommendations that could make branding and sponsorship of cannabis more difficult. We believe that Aurora will be unaffected as they have not, as yet, established a recreational branding strategy.”
With a “speculative buy” rating, Mr. Maruoka bumped his target price for the stock to $3.15 from $2.75. The analyst consensus price target is $2.75, according to Thomson Reuters.