Raymond James Upgrades Village Farms To Strong Buy After Pure Sunfarms Acquisition

Raymond James upgraded Village Farms (TSX: VFF) (NASDAQ: VFF) to a strong buy, up from a outperform rating and a $20 price target this week. This comes after Village Farms announced that they had completed their acquisition of Pure Sunfarms.

Back in September, Village announced that they would be purchasing the remaining 41.3% of Pure Sunfarms from Emerald Health Therapeutics (TSXV: EMH) for C$79.9 million. The acquisition consisted of a $60 million cash payment, along with a promissory note valued at $19.9 million which is set to mature six months from the date of issue.

Rahul Sarugaser, Raymond James’ analyst, comments, “As full owners of PSF, VFF has now cemented its position as Canada’s premier supplier of quality, high-volume cannabis.” A recent note was sent out a few weeks ago, where Sarugaser said that they believe the Canadian cannabis selloff is overdone for the strong operators. He says that they see data suggesting that Village Farms is “materially outperforming its peers in month-over-month cannabis sales.”

Furthermore, he points to Village’s Texas-based greenhouse footprint as an “increasingly-probable, federally-lawful U.S. CBD and/or cannabis opportunity.”

Sarugaser then talks about how Raymond James estimates that retails sales grew by 2% in the third quarter. October sales are down 5% from September, with Aphria, Canopy, Aurora numbers being flat or down 10% quarter over quarter. He says, “the same channel check data indicates PSF revenue trending upward at a consistent 15% MoM” and adds that Village is the only licensed producer to grow its market share in October.

Raymond James is currently forecasting revenues for Village Farms to hit $33.8 million and $10.8 million in US Produce and Canada Produce, respectively, in the third quarter. Meanwhile, its estimated that Pure Sunfarms will record $10.8 million in revenue via the sale of 12,726 kilograms of cannabis.


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.

Video Articles

Tudor Gold x American Creek: Consolidating A Massive Gold Project

Aura Minerals: The Era Dorada Underground PEA

Gold Is Now Smart Money’s End Game | Doug Casey

Recommended

Goliath Resources Expands 2025 Drill Program To 60,000 Metres

Emerita Resources Formally Appeals Administrative Ruling On Aznalcóllar Related To 2017 Complaint 

Related News

Mind Medicine: Canaccord Genuity Initiates Coverage With C$1.75 Price Target

Yesterday, Canaccord initiated coverage on Mind Medicine (NEO: MMED) with a Speculative Buy rating and...

Wednesday, September 16, 2020, 04:15:00 PM

Hexo: Stifel-GMP Puts Bankruptcy On The Table For Company Following Terrible Debt Deal

On October 29th, Hexo Corp (TSX: HEXO) reported its fiscal fourth quarter financial results. The...

Monday, November 8, 2021, 03:58:00 PM

Equinox Gold: Canaccord Reiterates Buy Rating, $12 Price Target

Early this month, Equinox Gold Corp. (TSX: EQX) reported its third quarter financial results. The...

Tuesday, November 23, 2021, 02:48:00 PM

Canaccord Lowers Targets On Numerous Top Level Cannabis Equities

On February 4th, Canaccord Genuity came out with their cannabis fourth quarter 2021 preview. On...

Monday, February 7, 2022, 01:30:00 PM

HEXO: Canaccord Lowers Price Target Following Redecan Transaction Announcement

On May 28th, Hexo Corp (TSX: HEXO) (NYSE: HEXO) announced yet another acquisition. The company...

Tuesday, June 1, 2021, 11:51:00 AM