This analyst just raised his price target on Curaleaf

Beacon Securities analyst Russell Stanley said in a May 5 report that Curaleaf Holdings (Curaleaf Holdings Stock Quote, Chart, News, Analysts, Financials TSX:CURA) posted slightly better-than-expected first-quarter results, raising his target to C$5.50 from C$5.00 and maintaining a “Buy” rating.

Curaleaf reported Q1 revenue of $324-million and Adjusted EBITDA of $63-million, ahead of Stanley’s $314-million and $61-million estimates and consensus at $317-million and $62-million. Revenue rose 6% year-over-year, helped by strength in Ohio, international markets, New York, Utah and Massachusetts.

The analyst said operating cash flow of $21-million also beat his $12-million estimate, allowing Curaleaf to end the quarter with $106-million in cash, up from $102-million sequentially, while funding $17-million in capital spending.

“CURA’s focus on improving product quality and yields has given it stronger pricing power, enabling price increases in select markets,” Stanley said, pointing to more stable pricing in Florida and Massachusetts.

Curaleaf should also benefit from U.S. cannabis rescheduling, with about 60%of U.S. revenue tied to medical markets. Stanley said the elimination of 280E taxes on medical sales should improve cash flow, while broader reform could eventually support banking access, exchange listings, exports and interstate commerce.

“These scenarios will take time to play out, and for now, the elimination of 280E on medical sales should significantly improve and de-risk the cash flow profile,” Stanley said.

Stanley expects Curaleaf to generate Adjusted EBITDA of $274-million on revenue of $1.334-billion in fiscal 2026, improving to $337-million on revenue of $1.472-billion in fiscal 2027.

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