HEXO stock is one of the best performing cannabis stocks in the sector. HEXO Corp's (TSX:HEXO) (NYSE:HEXO) solid operational performance and management prowess has led this stock to return 87% since the start of 2019.
That's impressive and gives little doubt as to why HEXO now has a consensus rating of "Buy" from multiple analysts. Even in the midst of a sector-wide downturn, these shares are on the rise today, up 1.65% and selling for $6.76 USD on the NYSE American.
The company has officially closed its most recent acquisition of Newstrike Brands (TSXV:HIP) (OTCPK:NWKRF). This is likely the impetus for today's rise; investors voted in favor of this takeover by a phenomenal 97.6%.
HEXO Stock Performance: Analysts Scream Buy
As stated, analysts’ consensus rating for HEXO Corp in May is "Buy". Broken down, according to Marketrealist, this works out as:
- Four analysts rate it a “strong buy”
- Eight have given it "buys”
- One analyst says to “hold” the stock
- Only one has given it a “sell” rating
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Now the company has a consensus price target of $7.90 USD. From current prices on the NYSE American, that represents a potential upside of 16%.
Newstrike Brands Acquisition
By receiving approval from the Ontario Superior Court of Justice, HEXO's acquisition of Newstrike Brands has now officially closed. On the news, CEO and co-founder Sebastien St-Louis marked today as the beginning of "the next phase of [HEXO's] great adventure.”
Increased Capacity
First announced in March, HEXO stock investors were onboard from the get-go. Newstrike Brands was worth the $263 million CAD price tag as the acquisition would greatly increase HEXO's annual production capacity by one third.
Now, with an estimated annual output of 150,000 kilos at its peak, HEXO is set to be the sixth largest cannabis grower in North America. This is quite an achievement for a mid-tiered company with a market cap just short of $2 billion CAD.
Newstrike is the parent company of UP Cannabis Inc, a licensed cannabis producer with supply deals across eight Canadian provinces. As such, the deal also further cements HEXO’s domestic supply deals.
Are you a HEXO stock investor? Let us know your thoughts on the closure of this deal.
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