Green Thumb Industries’ Q2 was “remarkable”, says Echelon Capital

Following a second quarter he describes as “remarkable”, Echelon Capital Markets analyst Andrew Semple has raised his price target on Green Thumb Industries (Green Thumb Industries Stock Quote, Chart, News CSE:GTII)

In a research update Thursday, Semple maintained his “Buy” rating on GTII but hiked his one-year price target from $21.00 to $25.00, implying a return of 24 per cent at the time of publication.

“Green Thumb Industries reported Q220 results that beat all broker estimates for both sales and EBITDA. The Company reported sequential sales growth of 17% and adj. EBITDA growth of 39% q/q despite significant headwinds in key markets such as Nevada and Massachusetts. Our outlook for the remainder of the year improves materially as the Company continues to outperform on almost all financial and operational targets. We maintain our Buy rating and raise our target price to C$25.00/shr (prev. C$21.00/shr) on our
increased estimates.

Semple now thinks Green Thumb will post Adjusted EBITDA of $153-million on revenue of $523.5-million in fiscal 2020.

“We believe GTI is a standout business in the US cannabis industry, for all the right reasons,” the analyst argued. “GTI is fully funded for its operations and buildout plans, has no pending M&A transactions (that have been announced), and we believe it is one of the few cannabis operators generating operating cashflow. The Company operates at meaningful scale in several of its markets, which has helped it achieve profitability far quicker than much of its peers, while also offering diversification benefits. We feel these combined factors have and will act as ballasts for GTI investors in these otherwise uncertain market conditions.”