Globe says The Valens Company maintained at "buy" ...The Globe and Mail reports in its Saturday, Oct. 17, edition that Desjardins Securities analyst John Chu continues to rate The Valens Company "buy."
The Globe's David Leeder writes that Mr. Chu, however, cut his share target to $4 from $4.75. Analysts on average target the shares at $4.42. Mr. Chu says in a note: "We have increased confidence that sales have troughed and should start to accelerate, which in turn should help stop the downward trend in EBITDA.
Valens has noted early success with several of its partners' 2.0 products but also sees a slower gross margin ramp-up. ... With demand for tolling services remaining weak, management expects product sales to represent over 80 per cent of total sales for the next few quarters.
The company is also seeing some early success with some of its partners' products, which account for four of the top 15–selling brands by dollar value on the OCS website. A crumble product already ranks fifth in OCS concentrate sales dollars despite launching only in late September, 2020.
Management noted that initial provincial orders were small but have since increased in both size and frequency." Mr. Chu expects overall sales "start to ramp up" as product launches accelerate.