Aphria stock is the notable gainer in the cannabis sector after an analyst at Jeffries issues a bullish report on Aphria Inc (TSX:APHA) (NYSE:APHA) stock.
Jeffries Sees 74% Rise in Aphria stock
Jeffries’ analyst Owen Bennett has set a price of $15 CAD on Aphria stock, a potential 74% rise from Thursday’s closing price of $8.62 on the CSE. Bennett has stated that there is a disconnect between the valuation of the stock and the strategic strength that the company enjoys.
As per the report, Aphria had been beset with controversies at the executive level in the recent past but those problems are slowly receding and that could be a trigger for strong performances in the near future. In addition to that, the cannabis grower is also primed for growth if medical marijuana is legalized all across the United States.
On Friday morning, Aphria stock is up a whopping 8.50% and now selling at $9.35 on the CSE. On the US side, APHA stock is up 8.10% at $6.93 on the NYSE.
Aphria Stock Under-performs This year
Over the past year, Canada based cannabis company Aphria has emerged as one of the more important players in the industry and while the stock has under-performed, there are still certain factors that could help in gaining some momentum.
The acquisition of LATAM Holdings was the basis of all controversies and due to allegations from a group of short sellers that the company had overpaid for the transaction; the company’s stock went down. However, an independent inquiry proved beyond doubt that the amount paid for the acquisition was not, in fact, an overpayment. Once the corporate issues are ignored, it emerges that Aphria is actually one of the top cannabis producers in the industry and if it continues in the same vein, then there is a possibility of the stock attaining momentum.
Currently, Aphria produces 115,000 kilos of cannabis annually but the company is all set to raise its capacity to 225,000 kilos per year. Additionally, it is a well-known brand in Canada and has also acquired permits from all the major provinces.
Aphria stock has underperformed the broader market and still down about 37% from its February peak price of $11 USD. Moreover, the stock is down about 60% from its 52-week high of $16.86.
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