Raymond James analyst Rahul Sarugaser has a $2.50 per share target price on Avicanna Inc. (TSX:AVCN) stock
SmallCapPower | January 25, 2021: In a recent note to clients, Raymond James analyst Rahul Sarugaser reiterated his “Outperform” rating on Avicanna Inc. (TSX:AVCN) stock while maintaining a $2.50 per share target price, which represents 53% potential upside from current levels.
The analyst said the cannabinoid platform company’s recent equity raise will help Avicanna reach breakeven cash flow by 2022.
“AVCN’s formal launch into the Colombian medical cannabis market comes as the culmination of years of preparation and collaboration with Colombia’s regulators and medical community. Coinciding with the introduction of medical cannabis products in the Colombian market, AVCN is launching robust education and training programs for the medical community, along with patient support programs, which we expect should drive adoption and market share capture in Colombia,” Mr. Sarugaser wrote.
“With AVCN’s anticipated turn toward cash-flow positivity in 2022, without the need for additional dilutive capital, we maintain our Outperform rating,” he added.
The Raymond James analyst estimates Avicanna’s 2020 revenue at $3 million along with negative $11 million in EBITDA, while anticipating 2021 revenue of $14 million and EBITDA of negative $2 million.
Mr. Sarugaser believes the company’s decision to begin selling its advanced cannabinoid formulations into the Canadian adult-use, ‘recreational,’ cannabis market for the first time will grow its revenue “materially from Q1 2021 onward,” with sales into provincial distributors starting in January 2021.
Avicanna is driven to provide patients with advanced formulations of cannabinoids backed by scientific rigor and clinical evidence.
The company was the only cannabis-related entity to be admitted into Johnson and Johnson’s prestigious research incubator, JLabs, in the MaRS Discovery District, and have been collaborating with institutions such as the University of Toronto, UHN and SickKids Hospital to conduct a level of R&D that’s unmatched in the industry.
As well, Avicanna’s RHO Phyto consumer product line debuted at Medical Cannabis by Shoppers recently and is the first line of purely medical Cannabis 2.0 products, consisting of medicinal oils, sprays, capsules, creams and gels.
Visit Avicanna.com to download the corporate presentation and find out more about the company.
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