iAnthus Capital is trading at a 70 per cent discount to its peers, Beacon says

This morning, iAnthus Capital announced it had closed a (US) $35-million offering of unsecured convertible notes and warrants.

“With the closing of the transaction with MPX Bioceutical Corp. in early February, iAnthus remains driven to become a market leader across our 11-state platform,”CEO Hadley Ford said. “This financing allows the company to simultaneously strengthen our balance sheet, deepen our investor base and fund our growth capital.”

Stanley says IAN is trading at a 70 per cent discount to its closest peers.

“IAN now trades at approximately 10x our 2020E EBITDA estimate, which represents a 50% discount to the 20x average for the broad peer group, and a 70% discount to the 33x average amongst companies with a C$1B+ market capitalization,” he says. “The stock continues to perform well and is up 25% over the past 3 months. Potential catalysts include the Q4/18 results in April, additional dispensary openings and further M&A activity.”

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In a research update to clients today, Stanley maintained his “Buy” rating and one-year price target of $16.00 on iAnthus Capital, implying a return of 111 per cent at the time of publication.

The analyst thinks IAN will generate Adjusted EBITDA of negative $22-million on revenue of $3.0-million in fiscal 2018. He expects those numbers will improve to EBITDA of positive $25-million on a topline of $188-million the following year.