Cantor Fitzgerald’s Pablo Zuanic supplied up to date scores and estimates on a number of shares from the hashish and CBD sector, these being – MedMen Enterprises (OTCQF: MMNFF), Jushi Holdings (OTCQB: JUSHF), cbdMD (AMEX: YCBD), and CV Sciences (OTCQB: CVSI).
The Analyst’s View
On Thursday, Zuanic saved an ‘Underweight’ ranking on MedMen inventory, whereas in an earlier notice, he withdrew their value goal.
On Jushi inventory, Zuanic maintains a ‘Impartial’ ranking, whereas reducing their value goal to $6.15 from $7.25.
Zuanic reiterated Cantor’s ‘Impartial’ ranking on cbdMD inventory, reducing their value goal to $3.25 from $4.10.
A ‘Impartial’ ranking was saved as properly for CV Sciences, whereas Zuanic withdrew the value goal on the inventory.
During the last three months, the inventory gained 18%, which compares to a 22% drop for the AdvisorShares Pure Hashish ETF (ARCA: YOLO), primarily due to higher market developments in California and Nevada, defined Zuanic.
MedMen inventory is overvalued based mostly on its fragile foundations, excessive leverage, earlier dilutive actions and lack of visibility in relation to constructive EBITDA, the analyst famous.
Zuanic added they’re involved in regards to the firm’s relationship with Inexperienced Gotham Companions, particularly what it may convey for minority shareholders.
Jushi inventory fell 28% within the final three months, which is a bit worse than the sector benchmark that dropped 22%.
“We consider the low cost is honest given the corporate’s much less developed nature vs. different MSOs and better publicity to retail,” Zuanic highlighted.
Whereas these issues are being resolved, Zuanic doesn’t mission “a lot of a re-rating” within the close to future, based mostly on which he selected to stay Impartial.
The analyst additional determined to decrease the value goal based mostly on sectoral de-rating – “our revised value goal is predicated on a 20% low cost to the sector common CY22 EV/EBITDA a number of.”
Consensus estimates for 2022 appear to be excessive when contemplating the unique level – an excessive amount of reliance on third occasion product retailing and no vertical integration in essential markets, Zuanic concluded.
CBD shares usually comply with hashish inventory developments, as seen with cbdMD, which fell 26% within the final three months, defined Zuanic.
“At current, the inventory trades at 4.2x our CY21 gross sales estimates (we’re 10% under FactSet consensus) vs. Charlottes Net Holdings (OTCQX: CWBHF) at 5.4x; for CY22 these metrics are 3.6x for each shares,” the analyst wrote.
Zuanic highlighted a number of funding dangers together with slowdown for the general CBD area, new harsh FDA pointers, lack of vital sponsorships and others, which “may result in additional shareholder dilution.”
CV Sciences Thesis
During the last three months, CV Sciences inventory misplaced 35%, in comparison with a 6% acquire for the S&P500, following the hashish inventory development with AdvisorShares Pure Hashish ETF (NYSE:YOLO) drop of twenty-two% over the identical interval.
“As a consequence of poor inventory liquidity, but additionally as a result of lack of operational visibility and continued market share loss, we’re withdrawing our value goal. That mentioned, we keep Impartial given the low cost to friends,” Zuanic wrote.
MedMen shares had been buying and selling 4.19% decrease at 26 cents per share on the time of writing.
Jushi shares had been additionally down 0.23% buying and selling at $5.35 per share
cbdMD shares slid 4.42%, buying and selling at $3.03 per share and CV Sciences shares had been buying and selling 1.53% decrease at 39 cents per share on the time of writing.