Invictus MD Strategies Corp is undervalued, says Echelon Wealth

Invictus MD Strategies (TSXV:IMH) is a cannabis producer that should be on the radar of investors, says Echelon Wealth Partners analyst Russell Stanley.

In a research report to clients Wednesday, Stanley initiated coverage of Invictus MD Strategies with a “Speculative Buy” rating and a one-year price target of $2.00, implying a return of 82 per cent at the time of publication. The analyst says Invictus, which has interests in two Health Canada licensed facilities and has a third application in development, is particularly attracive right now due to a recent and sharp downturn in share price.

“We view Invictus as an underfollowed cannabis producer with significant fully-funded growth potential,” the analyst says. “Possible catalysts include expansion announcements, improved financial results, and forthcoming clarity on the regulatory environment for Canada’s cannabis recreational market. Our target price is based on our estimates for F2020, although given the Company’s January FYE, we view its F2020 as essentially equivalent to C2019. We attribute the recent share price weakness to the expiration of the hold period on the March 2017 financing, presenting a buying opportunity for investors.”

Stanley thinks Invictus will generate Adjusted EBITDA of negative $9.0-million on revenue of $3.8-million in fiscal 2017. He expects those numbers will improve to EBITDA of positive $7.0-million on a topline of $22.4-million the following year.