The year is 2021, and publicly traded cannabis companies are being lauded for converting unsecured loans into equity so as to free up cash flow and improve financial flexibility. More specifically, the Canadian-founded High Tide Inc. (HITI) has removed its main obstacle to acquiring credit, and now can move forward with plans for a non-dilutive commercial credit facility. (See High Tide stock charts on TipRanks)
Andrew Semple of Echelon Capital Markets is optimistic on the stock, stating that High Tide’s “improved liquidity and visibility are expected to support the company's valuation.” Semple assigned a Buy rating, and declared a price target of $16.23, suggesting a possible 12-month upside of 99.09%. HITI closed up Wednesday at a price of $8.15 per share.
The five-star analyst also explained that High Tide has been uplisted to the Nasdaq, and more recently added to the AvisorShares Pure Cannabis ETF (YOLO). On the basis of these developments, Semple is confident that institutional investors will be more willing to put their faith, and money, in the company.
Regarding its debt, Semple elaborated that year-to-date, High Tide has lowered its position by over $80 million, and is now in a net cash position. Given its newfound liquidity, he hypothesized that High Tide would be able to seek out mergers and acquisitions for the company’s “US cannabis accessory and hemp-derived CBD e-commerce business, its accessory wholesale business, or selective tuck-in acquisitions of Canadian retailers."
On TipRanks, HITI has an analyst rating consensus of Strong Buy, based on 1 Buy rating. The average analyst High Tide price target is $16.23, reflecting a potential 12-month upside of 99.14%.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.