Cantor Raises OrganiGram Target On Hyfire Data

Data from the Hyfire retail platform suggests OrganiGram Holdings Inc.’s OGI sales trends improved during the fiscal fourth quarter, with a significant acceleration last month.

The OrganiGram Analyst: Cantor Fitzgerald's Pablo Zuanic maintained an overweight rating for OrganiGram, while raising the price target from C$5.00 to C$5.35.

The OrganiGram Thesis: The Hyfire data implies the company’s recreational sales grew 12% sequentially in the August quarter, after a 7% decline in the May quarter, Zuanic said in the note.

“In terms of monthly trends, the same data shows sales accelerated in Aug to ~30% MoM growth compared with low single-digits growth in Jun/Jul,” he wrote.

The analyst further noted, “If we compare Aug sales with May, we see total OGI sales were up nearly 40%, with flower +70% and pre-rolls +100%, but in that same period sales for both vapes and edibles fell 33% and oil sales fell 15%. So, by Aug the sales mix was 56% flower, 25% pre-roll, 13% vape, 3% edibles, and 3% oil.”

He raised the earnings estimates for fiscal 2020 and 2021 from C$88.9 to C$91.2E per share and from C$108.9 to C$119.8 per share, respectively.

OGI Price Action: Shares of OrganiGram had risen by 3.26% to $1.11 at the time of publication Wednesday.

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