Buy this cannabis stock for a double, analyst says

Haywood analyst Neal Gilmer maintained a “Buy” rating and $3.25 target on Organigram Holdings (Organigram Global Stock Quote, Chart, News, Analysts, Financials  TSX:OGI) in a May 12 update after a weaker-than-expected second quarter.

Organigram reported Q2 fiscal 2026 net revenue of $59.8-million, below Gilmer’s $66.4-million estimate and consensus at $68.8-million. Adjusted EBITDA was $0.9-million, down from $5.3-million in the prior quarter and below Gilmer’s $7.6-million forecast.

“Management cited what equates to a perfect storm where multiple operational issues emerged in the same quarter that impacted the results but have subsequently been addressed, and performance is stabilizing,” Gilmer said.

Gross adult-use sales fell 10.3% year-over-year and 4.9% sequentially, while adjusted gross margin declined to 30.8% from 37.5% in Q1. Gilmer said the quarter was affected by operational challenges, seasonal softness and more competition in vapes and pre-rolls.

Despite the miss, Organigram maintained the top licensed-producer position in Canada and held the No. 1 share in vapes, concentrates and milled flower.

Gilmer said the completed Sanity Group acquisition expands Organigram’s international revenue base, with management guiding to average quarterly revenue of €25-million over the next calendar year. Organigram updated fiscal 2026 guidance for revenue above $350-million, with Adjusted EBITDA above fiscal 2025 and free cash flow roughly breakeven.

“OGI further solidified its balance sheet at a notable premium to market with the investment from BAT that is now complete and better positions it to execute on its growth strategy,” Gilmer said.

Gilmer expects Organigram to generate Adjusted EBITDA of $21.2-million on revenue of $340.9-million in fiscal 2026, improving to $41.7-million on revenue of $451.6-million in fiscal 2027.

-30-