Curaleaf (CURLF) reported its second-quarter earnings results on August 28. The stock has fallen 6.3% since then. In September, the company announced the launch of medical cannabis tablets in Florida and medical cannabis flower products in New York. Let’s take a look at analysts’ price targets and ratings for Curaleaf.
What analysts are saying
On September 23, Beacon Securities analyst Russell Stanley shared his views after the company announced its medical cannabis flower launch in New York. Stanley thinks a medical flower launch in a state where only medical cannabis is allowed is a good move by the company. He feels it will drive market penetration.
He said, “The technical picture for CURA continues to look positive. CURA is now trading at 6x our F2021 EBITDA forecast. This represents a 10 per cent discount to the 7x average for the broad peer group, and is in line with the 6x average amongst US-operating cannabis companies.”
The analyst is positive about Curaleaf, saying that its progress on its Select and Grassroots acquisitions and its third-quarter results could drive its stock. Therefore, the analyst reiterated a price target of 25 Canadian dollars and a “buy” rating on the stock. This target represents a potential upside of 196% from its current price. Despite this positive outlook, CURA has fallen 18% since September 23.
Latest price update
The number of analysts covering Curaleaf stock is unchanged from before its results. The consensus price target for its stock fell to 16.5 Canadian dollars from its level of 18.7 Canadian dollars prior to the earnings release. This difference represents a fall of 11.7%. Its current revised price target means a potential upside of 87% over the next 12 months.
Following the company’s results, Haywood Securities reduced the stock’s target price to 17.5 Canadian dollars from 20 Canadian dollars. Additionally, Cormark Securities also downgraded its price target to 15 Canadian dollars from 18 Canadian dollars.
Tracking the trend for Curaleaf
Over the past 12 months, Curaleaf stock has received an increase in coverage from analysts driven by its improving fundamentals and acquisitions to drive growth. The number of analysts covering the stock has increased from one to eight over this period. Additionally, analysts’ number of “buy” recommendations has also increased on the stock. However, its price target has decreased in the period.
Analysts’ ratings for Curaleaf
While Curaleaf’s consensus price target has fallen since its earnings, the consensus remains bullish on the stock. Its overall “strong buy” rating remains unchanged from the period before its earnings release. The company’s missing its revenue estimate could be the reason for the change in its price target.
Currently, out of the eight analysts covering the stock, three have given it “strong buys,” and four have given it “buys.” (lower than five before its earnings release). One calls the stock a “sell.” To know more about Curaleaf’s valuation, read Curaleaf: Target Price and Valuation Multiple after Q2.
Meanwhile, Aphria has mostly “strong buy” ratings on its stock and a target price of 14.9 Canadian dollars. Cronos has mostly “hold” ratings and a target price of 20.03 Canadian dollars. Aurora Cannabis (ACB) has mostly “hold” ratings and a target price of 10.1 Canadian dollars.
Comparing Curaleaf with its peers
Curaleaf’s management has provided a bullish outlook for 2019. It expects its sales and profit margins to keep expanding throughout the year. Cannabis players are preparing for Cannabis 2.0, and it will be interesting to see how it affects their stock prices.
Meanwhile, analysts are optimistic about Hexo Corporation (HEXO) and Aphria stocks. Hexo’s management announced during its earnings call that the company was ready with expansion plans for Cannabis 2.0. Read Aphria: Analysts’ Target Price and Ratings and HEXO: Analysts’ Target Price and Ratings for more information.
In September, Curaleaf has fallen 10.3%, while it’s gained 31% year-to-date. Hexo has gained 3.2% this month, while Aphria has fallen 12.1%. Meanwhile, peer companies Aurora Cannabis and Cronos have fallen 13.4% and 13.7%, respectively, in September.
Curaleaf hasn’t announced the date for its fourth-quarter earnings results yet. Investors and analysts are curious to see whether Curaleaf’s third-quarter earnings can boost its stock further in 2019.
The Horizons Marijuana Life Sciences ETF (HMMJ) tracks the North American cannabis industry. It has lost 7.5% in September.
To learn more about recent updates in the cannabis industry and marijuana legalization, read Marijuana Legalization Ramps Up: Is Pennsylvania Next?