The merger between Tilray Inc (NASDAQ:TLRY) and Aphria was a “perfect match” and the entity could generate pro-forma sales growth of 33% between fiscal 2021 and 2024, according to Jefferies.
The Tilray Analyst: Owen Bennett upgraded the rating for Tilray from Underperform to Buy, while raising the price target from $4.77 to $23.
The Tilray Thesis: The company has a stronger sales and profit growth profile than its closest Canadian peers, Canopy Growth Corp (NASDAQ:CGC) and Cronos Group (NASDAQ:CRON), Bennett said in the upgrade note.
Tilray also has a “more attractive positioning to capture an EU upside, and equally compelling optionality for US THC,” he added.
“In Europe, the market is now picking up, while Tilray's scale and Aphria's unique German positioning make it perfectly suited to succeed. And in the US, the combined company's broader consumer goods portfolio and strong BS supports excellent optionality around both US THC and CBD,” the analyst wrote.
“Aphria's strong portfolio of 1.0 (flower) brands across targeted segments and price points sees the combined company with the number one value share in Canada at 17.1%,” he further stated.
TLRY Price Action: Shares of Tilray had risen by 16.77% to $20.05 at the time of publication Friday.