Jason Cohen

About the Author Jason Cohen

Jason is a Smarter Analyst editor and writer, who specializes in biotech and cannabis-based pharmaceutical companies.

Here’s Why This Analyst Doubled His Price Target on New Age Beverages (NBEV) Stock


After seeing struggles in 2018, marijuana stocks are back in the limelight. With new legalization efforts taking place and the evolution of the recreational cannabis market in Canada starting to become clearer, interest in top stocks in the industry has returned. So far in 2019, many cannabis stocks have posted big gains, including New Age Beverages (NBEV). Since the Christmas Eve market massacre shares in NBEV are up 25%, and opened Thursday at $6.45 per share.

Last week, the CBD-infused drinks maker announced an agreement with Docklight Brands to develop and distribute Marley branded cannabis-infused beverages. Under the Marley brand, the initial product rollout will proceed in Colorado, Oregon, Washington, and Michigan, states where cannabis is legal for adult consumption. The company expects to potentially expand distribution to additional states in the future as the regulatory landscape allows.

In reaction, Aegis analyst Rommel Dionisio doubled his price target on NBEV stock from $4.00 to $8.00, while reiterating a Buy rating on the stock. (To watch Dionisio’s track record, click here)

Dionisio commented, “After months of product development and rampant investor speculation about CBD beverages, which has certainly been a major positive catalyst on shares of NBEV, New Age Beverages at last publicly unveiled their new line of cannabis-infused beverages […] We believe New Age Beverages can generate significant revenue growth acceleration in upcoming quarters driven by a significantly expanded distribution platform in the U.S. and Canada, as well as contribution from major new product launches. In addition, we expect gross margin expansion in upcoming quarters due to fixed cost absorption from higher sales. On increased revenue estimates for 2019 given higher visibility from the newly unveiled CBD beverage line, we are increasing our price target on shares of NBEV from $4 to $8, which is derived by applying an Enterprise Value/2019E revenue multiple of 5x.”

Overall, most analysts on Wall Streets are out rooting for NBEV to be a winning stock pick, as TipRanks analytics showcase the stock as a Strong Buy. Based on 4 analysts polled in the last 3 months, 3 rate a Buy on the stock while 1 maintains a Hold. The 12-month average price target stands at $7.33, marking a nearly 12% upside from where the stock is currently trading. (See NBEV’s price targets and analyst ratings on TipRanks)

 

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