Alberta-based Decibel Cannabis Company Inc (CVE: DB) (OTCMKTS: DBCCF) is a marijuana stock worthy of having in your portfolio, according to Haywood Capital Markets analyst Neal Gilmer.
In a report released on Thursday to Haywood clients and subscribers, Gilmer reiterated his previous Buy rating and gave Decibel a new C$0.25 target — 257 per cent higher than the current trading price.
“Decibel has demonstrated the quality of its brands by capturing strong market share relative to the peer group,” the cannabis industry analyst highlighted. “As Decibel garners more awareness within the investor base, we believe the valuation will reflect this strong position in the market.”
Decibel’s performance in Q1 met expectations in Canada and exceeded them globally. The company’s Canadian recreational sales declined slightly while international revenue rose by 527 per cent year-over-year to C$2.22 million.
Gilmer expects this global weed revenue trend to continue, propelled by Decibel’s acquisition of AgMedica Bioscience and its 80,000-square-foot EU-GMP-certified facility last fall.
“AgMedica has been accretive since day one, and we expect it to accelerate as our strong pipeline activates in Q2 and beyond,” Decibel CEO Benjamin Sze said this week.
This pivotal takeover has enabled Decibel to export product to nations such as Spain, Norway, Denmark and Germany. Pre-acquisition, Decibel’s most significant international customers were Israel and Australia.
“We forecast a 35.2 per cent increase in revenues quarter-over-quarter in Q2,” the Haywood analyst said, “driven by both international sales as well as improvements domestically.”
Gilmer has over 10 years of experience analyzing the weed sector. He attained an MBA at Simon Fraser University in 2003 and a BA in finance at McGill in 1996.
His other top picks are OrganiGram Global Inc (TSE: OGI) (NASDAQ: OGI), Rubicon Organics Inc (CVE: ROMJ) (OTCMKTS: ROMJF) and Green Thumb Industries Inc (CNSX: GTII) (OTCMKTS: GTBIF).
Decibel’s four brands are Vox, Blendcraft, Qwest and General Admission. The latter two get sent to foreign markets.
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