In a recently released analyst research report, Beacon Securities Managing Director of Equity Research, Russell Stanley, reiterated his buy rating on shares of Canadian licensed cannabis producer CannTrust Holdings Inc. (NYSE:CTST) (TSX:TRST) (FRA:C9S) with a price target that suggests some noteworthy upside to come.
This analyst update comes just a few days after CannTrust Holdings Inc. announced that it is establishing operations in the United States, starting in the State of California. CannTrust signed a non-binding letter of intent that will provide access to over 3,000 acres of farmland for hemp production with Elk Grove Farming Company, LLC, a diversified farming company, to secure low-cost hemp with high CBD content. CannTrust and Elk Grove will each have 50% ownership of a new joint venture.
“This marks the company’s entry into the United States, beginning with the largest cannabis market in the country. We view the development positively, but are not yet specifically including it in our model/valuation, given that the venture is still at the non-binding LOI stage,” noted Stanley in his update.
Bullish on the new JV, Russell Stanley’s price target of $15.00 CAD per share implies a potential of approximately 120.26% based on the last traded price of $6.81 CAD per share on the TSX.
According to Cantech Letter, “The analyst says TRST is now trading at an 84 per cent discount to its US-listed peers and contends that the technical picture on the stock is “beginning to look more positive, given the stock’s positive response to [the JV news].””
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