Africa (NASDAQ: APHA) has recently become a favorite marijuana stock due to better-than-expected quarterly results and the looming merger with peers Tilray (NASDAQ: TLRY). A leading analyst on Tuesday added the positive sentiment with a significant price target increase.
The analyst, W. Andrew Carter of Boots, increased its price to 15.50 Canadian dollars ($ 12.14), compared to the previous C $ 9.80 ($ 7.67). While doing so, however, he maintained his neutral rating on the stock.
The forecaster believes that the results of the second quarter highlight the strength of Aphria, despite a decline in sales of the company’s most important Canadian marijuana marijuana segment. Stifel maintains its hold on the stock because the subsequent price increase (also based on the prospects for US removal of marijuana at Federal level) limits the stock’s potential to outperform.
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Elected Vice President Kamala Harris has promised that her government will take this step, although it is likely to have greater priorities, such as the national response to the coronavirus pandemic, and the reversal of certain policies instituted by the outgoing Trump administration.
Regardless of when or when the U.S. ignites the weeds, Aphria introduces itself as a major North American marijuana business. In addition to the association with Tilray (which is in fact a takeover, although the joint ventures will adopt the Tilray name), Aphria also fills in other assets. In November, he announced that he was buying SweetWater Brewing, a cannabis-flavored beer maker, for about $ 300 million.
Investors were clearly encouraged by Carter’s price target increase. They are offering Aphria almost 10% on Tuesday, despite the analyst’s insistence on upholding the recommendation on hold. On the other hand, the S&P 500 increased by less than 1% on the day.