BioTuesdays

AGP starts Curaleaf Holdings at buy; PT $14

Alliance Global Partners initiated coverage of Curaleaf Holdings (CSE:CURA) with a “buy” rating and price target of $14 (Canadian). The stock closed at $8.56 on Feb. 10.

“We view Curaleaf as well-positioned to succeed in the U.S. cannabis space with a diversified geographic footprint and focused brand strategy,” writes analyst Aaron Grey. “The company has already demonstrated the ability to operate profitably, with our model pointing robust long-term margin potential, along with top-line growth.”

Mr. Grey said Curaleaf has nearly 140 retail licenses in 21 states. “We expect it will continue to benefit from states legalizing adult-use cannabis as Curaleaf has a presence in 12 states that are considering legalization in 2020,” he added.

In addition, he said the company has a focused strategy of utilizing its newly acquired Select brand in the adult-use market and Curaleaf brand in the medical market.

Curaleaf is guiding for pro forma revenues to come in at $1-billion to $1.2-billion in 2020, “with our numbers conservatively coming in below the low-end of guidance at $752-million, given a slower roll-out of stores than we believe management had anticipated, continued regulatory bottlenecks, and Select closing one month later than expected,” Mr. Grey said.

Sign up for the BioTuesdays weekly newsletter

Get the latest news on the healthcare industry’s corporate and clinical developments, executive moves, and market updates. Every Tuesday, in your inbox.