All posts

Columbia Care stock is a buy post Cresco, Roth says

In the post-Cresco Labs era, Columbia Care (Columbia Care Stock Quote, Chart, News, Analysts, Financials CSE:CCHW) is still a buy, says Roth MKM analyst Scott Fortune.

On July 31, Cresco Labs and Columbia Care mutually decided to call off their proposed merger.

“In light of the evolving landscape in the cannabis industry, we believe the decision to terminate the planned transaction is in the long-term interest of Cresco Labs and our shareholders. We want to express our sincere gratitude to Columbia Care for their valuable collaboration and dedication during this transaction,” said Cresco CEO Charles Bachtell.

The Roth analyst says that in light of that development, CCHW is now free to shore up its own balance sheet.

“CCHW management was planning on addressing its balance sheet earlier, but was held up due to the pending Cresco Lab merger,” Fortune explained. “Now operating as a standalone business, the company was able to execute on equitizing a significant portion of its debt, while raising $25M (option to add
$25M) to further reduce leverage, capitalizing on the recent runup of its stock (up over 200%) over the past month. Given the ~29 month drawdown across the cannabis industry, we believe the recent runup will allow levered companies to address these debt positions and provides another avenue to raise capital for long-term survival, despite the dilution.”

In a research update to clients September 20, Fortune maintained his “Buy” rating and one-year price target of $1.00 on Columbia Care.

The analyst thinks CCHW will post EBITDA of $81.7-million on revenue of $520.3-million in fiscal 2023. He expects those numbers will improve to EBITDA of $107.2-million on a topline of $565.5-million the following year.

Tagged with: cchw
Nick Waddell

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.

Recent Posts

Lightspeed Commerce price target slashed at National Bank

Following the company's third quarter results, National Bank Financial analyst Richard Tse has cut his price target on Lightspeed Commerce… [Read More]

3 days ago

Stingray Group wins price target raise at Desjardins

Following the company's third quarter results, Desjardins analyst Jerome Dubreuil has raised his price target on Stingray Group (Stingray Group… [Read More]

3 days ago

Aurora Cannabis stock soars on Q3 results

If the pot stock trade is done, someone forget to tell Aurora Cannabis (Aurora Cannabis Stock Quote, Chart, News, Analysts,… [Read More]

5 days ago

Tantalus (TSX:GRID) has little exposure to tariffs, Paradigm says

The burgeoning tariff war has taken a bite out of Tantalus Systems (Tantalus Systems Stock Quote, Chart, News, Analysts, Financials… [Read More]

6 days ago

Is Celestica still a buy?

The stock has been on fire since September, but Stifel analyst Ruben Roy thinks there is still money to be… [Read More]

6 days ago

WELL Health has a “giant” runway, Paradigm says

It's gone from zero to a billion in record time but there is plenty more runway for WELL Health Technologies… [Read More]

6 days ago