Ascend Wellness: Canaccord Lowers Target To US$10

On January 14th, after a number of press releases from Ascend Wellness Holdings, Inc. (CSE: AAWH.U), the company finally announced that it has filed a complaint against MedMen Enterprises Inc. (CSE: MMEN) and a preliminary injunction against them. This is in regards to Medmen’s unwillingness to transfer their New York license to Ascend.

Ascend Wellness currently has 8 analysts covering the stock with an average 12-month price target of US$13.19, or a 140% upside to the current stock price. Out of the 8 analysts, 2 have strong buy ratings while the other 6 have buy ratings. The street high sits at US$18, or a 228% upside to the current stock price, while the lowest price target sits at US$10.

In Canaccord Genuity’s update note, they reiterate their buy rating but lower their 12-month price target from US$13 to US$10 after reducing their Illinois and New Jersey estimates.

Canaccord has lowered its fourth-quarter estimates to $86.1 million in revenue and $19 million in adjusted EBITDA, putting the full-year estimates at $330 million and $78.7 million for revenue and adjusted EBITDA, respectively. They say that this revision primarily comes from “pricing pressure and a later-than-anticipated planting in IL, and a slower start to rec benefits in NJ.”

On the lawsuit, although Canaccord does not include any contributions from New York in their full-year estimates, they view that this asset is attractive and could possibly drive 5-10% of sales once integrated.

Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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