Original-Research Agrios Global Holdings Ltd. (von GBC AG): BUY
Original-Research: Agrios Global Holdings Ltd. - von GBC AG
Einstufung von GBC AG zu Agrios Global Holdings Ltd.
Unternehmen: Agrios Global Holdings Ltd.
Anlass der Studie: Research Note
Kursziel: 1.64 CAD
Kursziel auf Sicht von: 31.03.2021
Letzte Ratingänderung: -
Analyst: Matthias Greiffenberger, Julien Desrosiers
'Still on track' Target price raised to 1.64 CAD (previously: 1.38 CAD) Buy Rating confirmed. Agrios' financial results are improving while the company continues to invest in its Shelton facility.
By year's end, the facility should be completed, paving the way for a new growth phase. The company's expenses have significantly decreased and all metrics have improved.
Agrios Global Holdings is a company in the take-off stage, with a strong growth potential. It currently owns one state-of-the-art cultivation growing facility in Washington State that is leased to a licensed Tier 3 cannabis producer and processor. The company provides data-driven aeroponic cultivation equipment rental and growing services to cannabis producers. The company's technology can also be used for any type of indoor cultivation. The indoor aeroponic market in the USA could reach USD 40 billion annually by 2022. Moreover, the American cannabis market could reach USD 75 billion annually by 2030. Specifically, the Washington State market represented approximately USD 1.371 billion in 2017 and is expected to grow to USD $2.28 billion by 2020.
The cannabis landscape in Washington State continues to show signs of recovery and we believe that the company can profit from this positive trend. However, legislation continues to be an important unknown as the state has just banned flavored cannabis vaping products. We expect such regulations to come and go given that the industry is still at a very early stage and since cannabis is still illegal on the federal level.
An interesting case occurred in Washington State where a man sued producers over an illness due to the poor quality of a cannabis product. This increases our confidence in Agrios' approach of quality over quantity and ensuring perfect reproducibility of their products. We continue to believe that their digitalized and automated growing facilities represent the inevitable solution to many of the current and future issues for cannabis producers.