Canopy Growth Corp [NYSE: CGC]: Cannabis stocks remain on the ladder for investors seeking growth. One stock that particularly seems to have analysts all excited is Canopy Growth Corp. Based on data from TipRanks, out of 13 Wall Street Analysts, none of them believe that CGC is a sell. Eight of them believe that this stock is a buy, while 5 of them believe it is a stock worth holding. In the last one month, Merrill Lynch has initiated a buy upgrade for CGC. Another analyst, Piper Jaffray has reiterated that CGC is a buy. The consensus price target for the analysts is $60, a good target for a stock that is currently trading at $48.44.
One of the factors that is acting as a basis for the positive outlook is CGC’s acquisition of Acreage holdings, an NYC based Marijuana Company. The terms are that the deal will go through, as soon as Cannabis is completely legal in the United States. Things seem to be looking good for CNG on this front. Late last year, Michigan became the 11th State to legalize Marijuana. Other States are following, suit with Illinois being the latest to legalize it. Adults aged 21 and above can now legally buy Marijuana from licensed dealers in Illinois. The current trajectory shows that in the foreseeable future, Marijuana will be legal across the United States. This makes the acquisition of Acreage holdings a strategic move by CGC, one that could give it a huge advantage in the U.S cannabis market, going into the future.
One analyst, Owen Bennett of Jefferies believes that CGC together with Canadian cannabis firm Aurora, have the greatest potential to dominate the global Cannabis market for many years to come. This in his view, gives CGC good upside potential in the next one year. It could also place these two stocks on a solid growth trajectory for many years to come. These projections are not far-fetched.
According to a research by Grand View Research, the legal Marijuana market is expected to be worth $146.4 billion by the year 2025. That’s a compound annual growth rate (CAGR) of 34.6%, higher than what most industries are forecasted to deliver within the same period. The growth will be driven by investments in R&D, as well as the increased uptake of recreational marijuana as it continues getting legalized in different jurisdictions. The expected growth of the entire industry is likely to solidify the growth potential of dominant industry players like CGC.
From a look at this stock’s price action, it hasn’t disappointed so far. It has been on a bullish trajectory since the beginning of the year. Its books also show a high growth company. The company’s quarterly earnings growth (yoy) stand at 4,169%. It has also outperformed the S&P 500 by a huge margin. In the last 52-weeks, the S&P 500 has returned 9.72%, while CGC returned 109.36%. All this points to a company that is on a growth trajectory, and one that could deliver even higher gains with its latest acquisition.