Yesterday, Compass Point initiated coverage on Cresco Labs (CRLBF) with a “buy” rating and a $16 price target. On June 3, Eight Capital also started coverage on Cresco Labs. It gave the stock a “buy” rating with a target price of 20 Canadian dollars. Cresco Labs has received a “strong buy” rating from two analysts, while four analysts have given it a “buy” or equivalent rating. Cresco Labs has received a mean consensus price target of 20.37 Canadian dollars, which represents a potential upside of 55% over yesterday’s closing prices. Cresco Labs has seen a downwards price action of 13% this month but is up 42% this year.
Origin House acquisition
Cresco Lab is a multi-state cannabis company with a presence in both the adult use and medical cannabis market. The company has an integrated business model and has its own production and distribution facilities. It also distributes its products through other dispensaries. The company is acquiring Origin House. The Department of Justice has requested additional information from Cresco Labs about the acquisition. Yesterday, in its release, Cresco Labs said, “We are confident that we will be able to submit all requested documentation to the Department of Justice as soon as possible and continue toward closing of the transaction.”
Earnings and financials
Cresco Labs released its first-quarter earnings last month and posted a fourfold rise in revenues. However, some of the profitability metrics like EBITDA and net income showed deterioration as compared to last year. Read Cresco Labs’ Q1 Sales Spiked but Still Fell Short of Estimates for a broad overview of Cresco Labs’ first-quarter earnings.