Charlotte's Web Holdings (CWBHF) PT Raised to $5 at Cantor Fitzgerald

January 29, 2021 6:47 AM EST
Get Alerts CWBHF Hot Sheet
Price: $4.51 +0.89%

Rating Summary:
    2 Buy, 1 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 17 | Down: 14 | New: 42
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Cantor Fitzgerald analyst Pablo Zuanic raised the price target on Charlotte's Web Holdings (OTC: CWBHF) to $5.00 (from $3.90) while maintaining a Neutral rating.

The analyst commented, "We believe Charlotte’s Web is well placed to have a productive 2021, even without the much expected and hoped-for FDA guidelines for the CBD industry (yes, we think these are a source of optionality), through door expansion in the US, continued innovation, entering new segments, and increasing consumer awareness of its more efficacious full spectrum CBD product. That said, we think consensus projections are high, calling for 45% sales growth for 2021 (guidance will be issued in late March when the company reports 4Q), and at 5.5x EV/current sales we do not think the valuation is necessarily compelling (the stock is up ~40% in the last 3mo). For context, the top MSOs trade at 8-12x current sales, but with much better growth momentum and EBITDA margins of ~30% (vs. losses for CBD companies). We believe clear FDA guidelines and CBD being classified as a dietary supplement will meaningfully impact the industry’s growth outlook and help weed out smaller operators (that sometimes bring disrepute to CBD), but we see this more as an early 2022 factor (the change in administration may delay the process). Net, we like the long-term set-up for the stock, but for now, prefer to wait for greater regulatory clarity (visibility, timing) and for the company to issue 2021 guidance (that we think will be below consensus)."

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