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What “strong buy” cannabis stock could offer the highest upside potential?

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Cannabis stocks have continued to decline this year due to a lack of favorable reforms and continued delays in legalizing cannabis at the federal level. Marijuana is still a Schedule 1 substance in the United States under the Controlled Substances Act, which means it has no currently accepted medical use and has a high potential for abuse. Meanwhile, more US states continue to legalize cannabis and drive additional growth. Here we will discuss three cannabis stocks – Jazz Pharmaceuticals (Jazz), green thumb (GTBIF) and Curaleaf Holdings (curve) (TSE: Kura) that Wall Street analysts are very optimistic about it. Use TipRanks stock comparison toolWe pit these three cannabis stocks against each other to choose the one that can offer the most upside potential.

Jazz Pharmaceuticals (Jazz)

Jazz is a biopharmaceutical company that develops drugs focused on neuroscience and oncology. The company’s 2021 acquisition of GW Pharmaceuticals strengthened its portfolio by adding Epidiolex, the first marijuana-derived drug to be approved in the United States.

Jazz continues to expand the prescriber base for Epidiolex and is generating data to further build broad applications of Epidiolex across different seizure types. The company is also expanding Epidiolex into European markets, where it is called Epidyolex. Furthermore, Jazz’s pipeline includes both early and late-stage cannabis product candidates, which could lead to long-term growth if approved.

Is jazz a good stock to buy?

Following Jazz’s upbeat second-quarter results, HC Wainwright analyst Oren Livnat Repeat the buy rating and increase the target price for Jazz stock to $204 from $200 on marginally higher EPS estimates. Livnat noted that the company beat analyst estimates across its nerve and oncology lines.

Wainwright feels Street is underestimating Jazz’s cash flow generating capabilities amid limited competition from Xyrem AG (certified public). Xyrem is the main Jazz medication that is used to treat excessive daytime sleepiness and cataplexy in narcolepsy patients. The analyst also noted that strong operating cash flows helped reduce net leverage to 3.2x, which is six months ahead of the company’s goal of reducing net leverage to less than 3.5x by the end of 2022.

On TipRanks, Jazz has a strong buy consensus rating based on eight purchases and one single purchase. average Jazz stock price prediction From $199.22 it indicates a potential upside of 28.6%.

Curaleaf Holdings (CURLF)

Curaleaf is one of the largest multi-state cannabis operators in the United States with operations in 22 states. The company has also expanded into the European hemp market by acquiring EMMAC Life Sciences Group last year.

Curaleaf’s second-quarter revenue grew 8% year-over-year to $337.6 million and beat analyst estimates. Gains from higher retail revenue were made even as wholesale revenue declined. Net loss widened to $0.04 of $0.01 in the previous quarter but was in line with Street expectations. The impact of higher operating expenses and growth investments on net income.

Curaleaf attributed its decline in wholesale revenue to continued evaluation of its wholesale business in California and Colorado.

Meanwhile, the retail business gained from strong growth via the Curaleaf footprint and the addition of 28 new stores throughout the year. Furthermore, the company has benefited from additional sales from New Jersey, which began legal sales of recreational cannabis in April.

Is CURLF BUY OR SELL?

Recently, Jefferies analyst Owen Bennett lowered its revenue estimates for Curaleaf and Trulieve Cannabis (TCNFF), Kronos group (krone), canopy growth (CGC) to reflect the impact of increased gasoline and food prices, as well as increased supply in some markets, on cannabis sales. The analyst trimmed his revenue estimate for Curaleaf to $1.41 billion from $1.45 billion.

Bennett noted that both Trulieve and Curaleaf are facing price pressures in their wholesale divisions due to increased competition and oversupply. However, the retail operations of these two US companies have been going relatively well.

Bennett reiterated its buy rating on Curaleaf, saying: “We are encouraged to see another multi-country operator (MSO) effectively dealing with the increasing pressures of the industry.”

Overall, the consensus among analysts is strong buy, backed by nine longs and one contract. average CURLF TARGET PRICE From $9.22 it indicates a potential for a rally of about 43%.

Green Thumb Industries (GTBIF)

The US multi-country operator Green Thumb delivered results that outperformed the market in the second quarter despite challenging market conditions. Green Thumb has 17 manufacturing facilities and 77 retail locations in 15 US markets. The company’s RISE cannabis retail stores are expanding at a rapid rate. It is worth noting that Green Thumb has had a positive net income for eight consecutive quarters, unlike many of its peers, who remain unprofitable.

Green Thumb’s second-quarter revenue increased 14.6% year-over-year to $254.3 million, thanks to strong traffic in existing stores, the start of adult cannabis sales in New Jersey, increased sales from Illinois, and the opening of 19 new retail locations. The last year. The share price was stable at $0.10 on an annual basis.

Is Green Thumb Industries a Buy?

After printing the second quarter, Alliance Global Partners analyst Aaron Gray Repeat the purchase evaluation on the Green Thumb. However, it lowered its target price for the Canadian stock-traded company’s shares to C$25 from C$40.

Gray believes the Green Thumb is “among the best in weathering the storm” amid a competitive environment, tough capital markets, and federal illegality. The analyst is optimistic about the company based on its strong balance sheet, focus on outstanding offerings, and positive operating cash flow.

Other analysts seem to agree with Gray’s bullish stance, with Green Thumb registering a strong consensus rating of buy based on 11 unanimous purchases. At $23.41, average GTBIF price target It indicates an 80.6% upside potential.

Conclusion

Despite the uncertainty associated with the legalization of cannabis at the federal level and ongoing macro headwinds, Wall Street remains very optimistic about the three cannabis stocks. After the big drop in Green Thumb stock year-to-date, analysts see strong upside potential in the times ahead. Based on its upside potential, Green Thumb appears to be a better choice than Jazz Pharmaceuticals and Curaleaf.

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