Notwithstanding his caution, he's still looking for a triple which is indicative of how cheap most companies in the MJ sector have become.
Also note that one of our supporters (Bruce Campbell 2) is back on today's Market Call. GLTA
Citing near-term uncertainty brought on by Canopy Growth Corp.’s acquisition of Wana Brands, Raymond James analyst Rahul Sarugaser lowered his rating for Indiva Ltd. (NDVA-X) to “outperform” from “strong buy.”
Ottawa-based Indiva currently possesses the exclusive license to market Wana’s gummies in Canada, which Mr. Sarugaser said has pushed its “dominance” in the edible markets.
“Our initial take is that this transaction clearly illustrates the strength of the Wana brand as it has captured the ‘largest multi-market presence of any independent edibles brand across the U.S. gummy market, and #1 share of the Canadian gummy market,’” he said. “We have seen clear evidence of this strength as Wana has powered NDVA to capturing the #10 market share spot in Canada with 2.3 per cent, while CGC’s total share has dwindled to less than 10 per cent. As such, we had posited in our initiation of coverage on NDVA that, based on this dominance, NDVA is (was) an ‘M&A Target if We’ve Ever Seen One.’
“So, with [Thursday] morning’s news, in our view, NDVA’s potential acquirer universe has now narrowed to one player: CGC. That said, in order for CGC to ensure durability of the Wana brand in Canada in the interim period before it fully acquires Wana the company, logic would dictate that CGC should want to motivate NDVA to continue its success in marketing Wana, and so, CGC and NDVA will need to play nice.”
Mr. Sarugaser cut his target for Indiva shares to $1.25 from $1.75. The current average is 94 cents.