At the close on Friday, HEXO stock was up approximately 9%, despite the overall marijuana market being in the red. Now, in premarket trading, shares are climbing further as investors once again flock to HEXO Corp (TSX:HEXO) (NYSE:HEXO).
Let's check this out.
HEXO Stock
HEXO Corp is arguably one of Canada's leading cannabis plays. The Quebec-based company is eyed closely by top analysts and investment firms whose bullish opinions continue to spur on stock gains.
The company's operational success has continued to meet or beat expectations, cementing an overall bullish sentiment that surrounds this company. Its latest earnings results—issued in March—beat analysts' consensus in both EPS and revenue.
The company reported revenue of $10.9 million during the quarter when analysts expected $10.1 million. Further, it topped earnings-per-share by $0.02.
Consensus of Buy
Now, HEXO stock is selling for $7.81 USD on the NYSE and still has a low evaluation considering the company has a consensus price target set at $8.29 USD. This target is an average set by analysts from Beacon Securities, Bank of America, and Oppenheimer, among others. Further, across nine analysts, it carries a consensus rating of "Buy".
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With major firms telling investors to "Buy", institutional investors and hedge funds have increased their shareholdings of the company. Some examples include Mycio Wealth Partners LLC, which purchased another $343,000 worth of shares, and Canada's own Bank of Montreal, which upped its stake in HEXO stock to roughly $3,439,000.
Warranted
Since the beginning of 2019, HEXO stock has more than doubled its value. It is on the radar for three reasons in particular.
- A lucrative deal with Quebec province has given the company a market-leading share of 35% of the province's sales. This deal also offers a continual and lucrative revenue stream and highlights the management's prowess for securing such a big deal for a mid-tiered cannabis company.
- A strategic deal with beverage giant Molson Coors (NYSE:TAP) also helps to seal the deal for investors. The fruits of this venture should bloom in the latter half of 2019 when edibles and cannabis-infused drinks are made legal across Canada.
- Most recently, the company acquired Newstrike Brands (TSXV:HIP)—a move that caused further excitement across the market. Because of this, HEXO's production capacity is expected to increase significantly by 1/3, giving it an overall capacity of 150,000 kilos at its peak. If those estimations are accurate, HEXO Corp will be the sixth largest cannabis grower in North America.
Are you a HEXO stock investor? Do you agree with the analysts' "Buy" consensus?
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