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Analysts Favor ‘Buy’ Ratings on MedMen Enterprises

Analysts’ recommendations

Of the six analysts that cover MedMen Enterprises (MMEN) (MMNFF), all are favoring “buys” on its stock. On average, analysts have given MMEN a price target of 8.18 Canadian dollars, which represents a potential upside of 92.9% from its current price of 4.24 Canadian dollars.

On December 10, Canaccord Genuity lowered its price target from 7.50 Canadian dollars to 7.00 Canadian dollars.

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Peer comparison

Of the 11 analysts that track Canopy Growth (CGC) (WEED), 81.8% have given it “buys,” 9.1% have given it “holds,” and 9.1% have given it “sells.” On average, analysts have a price target of 64.43 Canadian dollars on the stock, which represents a potential upside of 29.3% from its current price of 49.82 Canadian dollars.

Of the five analysts that cover Cronos Group (CRON), four analysts have given it “buy” ratings, while one has given it a “hold” rating. On average, analysts have a price target of 19.60 Canadian dollars on the stock, which represents a potential upside of 13.3% from its current price of 17.30 Canadian dollars.

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Of the five analysts that cover Aurora Cannabis (ACB), four have given it “buy” ratings, while one has given it a “hold” rating. On average, analysts have a price target of 11.80 Canadian dollars on the stock, which represents a potential upside of 49.8% from its current price of 7.88 Canadian dollars.

Valuation multiples

Because MedMen Enterprises is still in the growth phase of the business life cycle, its expenses will be on the high side, and we can’t consider its EPS for valuation purposes. We’ve opted instead to consider its forward EV-to-sales (enterprise value-to-sales) multiple.

As of January 10, MedMen was trading at a forward EV-to-sales multiple of 4.42x. On the same day, its peers Canopy Growth, Cronos Group, and Aurora Cannabis were trading at forward EV-to-sales multiples of 26.9x, 22.5x, and 12.5x, respectively.

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