Harborside Inc (CSE: HBOR) this past week announced that they have completed their facility upgrades at their Salinas cultivation facility. The additional capacity increased their annual capacity by over 50% and now the facility is able to grow year-round.
Harborside currently has two analysts who cover the company, with the firm having a weighted average 12-month price target of C$4.13, a 116% upside. Both the analysts have buy ratings on the stock. Beacon Securities has the street high at C$4.75 while ATB has a C$3.50 price target for Harborside.
Beacon this past week reiterated their buy rating and C$4.75 price target. Their analyst Russell Stanley says that this latest development will allow the company to “implement high-yield indoor cultivation practices, enabling year-round cultivation.” This increases their total production by about 7% he says, and that a recent zoning approval allows the company to have more flexibility for expansion. He adds, “We view both developments positively, as they set the stage for expanded cultivation capacity that will become particularly valuable following the Sublime (private) acquisition.”
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Stanley notes that Harborside is now trading at 6.2x their 2022 EBITDA estimate, giving it roughly a 50% discount to other US operators. Below you can see their comp sheet. They give three catalysts that could help close this valuation gap, the first being finding a new CEO, the second is closing of Sublime and updated guidance. The final potential catalyst consists of the company pursuing additional M&A.
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