Tilray Inc (NASDAQ: TLRY) is focused on brands, distribution, strategic partners and an asset-light model, according to Cantor Fitzgerald.
Tilray's Global View, Opportunities In Germany
Analyst Pablo Zuanic provided highlights from an investor conference call with Tilray CFO Mark Castaneda in a Monday note.
The company doesn’t view cultivation as being the "value in the value chain" in the long run, the analyst said.
“Tilray thinks that, at the start, many Canadian companies are focused on funded capacity, but with capacity plans 2-3x demand, TLRY feared those assets would lose value over time (a lot of those plans have been shelved or delayed due to slow demand buildup).”
Spot prices have not come down and the quality of flower varies, Castaneda told Cantor Fitzgerald.
Tilray has invested in cultivation in Portugal.
“It sees the international medical market, as well as the U.S. CBD and rec markets (once federally legal) as larger market opportunities than Canada," Zuanic said.
"Tilray says it has a more global view than peers and expects to be a top 3-4 player in a global context over time."
Germany is set to provide Tilray with its biggest medical cannabis market outside Canada, followed by Australia, the analyst said.
Tilray expects its clinical trial strategy to boost medical cannabis sales in the future, he said.
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Tilray recognizes the difficulties in the Canadian medical market, such as a more limiting med model versus Germany, with medical cannabis not being accessible in pharmacies and subject to taxation, Zuanic said.
“However, over time it expects favorable changes in the Canadian medical market, including a model without taxation.”
Cantor Has Faith In Tilray's Positive Catalysts
Within the context of Cantor Fitzgerald's coverage group, the firm rates Tilray Neutral in relative terms, but sees the stock as one that should trade higher with the group in the year ahead, Zuanic said.
Cantor Fitzergald maintained a Neutral rating on Tilray with a $26 price target.
Photo courtesy of Tilray.
Latest Ratings for TLRY
|Nov 2019||Initiates Coverage On||Neutral|
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