Zuanic & Associates gave Jushi Holdings Inc. (CSE: JUSH) (OTC: JUSHF) an Overweight rating as the firm begins its coverage of the marijuana company. The analysis underscores Jushi's substantial potential within the cannabis sector, spotlighting its strategic footprint across seven states and its advantageous position for the shift to recreational weed sales in pivotal markets.
Overweight Valuation
According to senior analyst Pablo Zuanic, the Overweight rating for Jushi Holdings is rooted in a combination of undervaluation and strategic positioning.
He notes that Jushi's current valuation at 1.5x sales starkly contrasts with the MSO average of 2.2x, signaling a significant undervaluation given the company's expansive operational footprint and strategic advantages. This valuation gap, Zuanic argues, does not fully account for the company's potential revenue growth driven by its readiness to seize the recreational cannabis market opportunities in states like Pennsylvania and Virginia.
Zuanic forecasts that the transition to recreational sales in these states could notably expand Jushi's EBITDA, potentially by close to 6x and position the company for as much as 16x upside for its stock, underpinning the rationale behind the Overweight rating.
Strategic Market Position
Zuanic highlights Jushi's valuation at 1.5x sales, which is notably below the multi-state operator's (MSO) average of 2.2x, suggesting an unjustified discount given its considerable growth potential.
He emphasizes the company's exceptional "market cap torque" within the MSO group, especially with PA's potential shift to adult-use sales, reinforced by Jushi's exclusive licensing in Virginia.
Zuanic's report also scrutinizes the broader competitive landscape of the cannabis industry, shedding light on key players that vie alongside Jushi. Green Thumb Industries (OTC: GTBIF) and The Cannabist (OTC: CBSTF) are specifically recognized for their strategic advantage in Virginia.
The analysis further includes Curaleaf ...