Fire And Flower: Why This Analyst Lowered His Price Target Yet Remains Bullish & Sees Nearly 100% Upside Potential

The Analyst

Pablo Zuanic, an analyst with Cantor Fitzgerald, qualified Fire And Flower (FAF) (NYSE: FAF) (OTC: FFLWD) as Overweight and lowered its price target to C$10.40 from C$13.

The Thesis

In his analyst note, Zuanic argued that Canadian retailers “are in for a rough year ahead as more stores open and some chains opt for blanket discounting. That said, we are more comfortable with Fire and Flower's asset-light business model and technology-driven tactical approach to price adjustments.”

Zuanic added that Fire and Flower is assembling a “robust” tech platform that may eventually lead to growth not just in Canada. “At 1.1x our 2022 sales estimate (factoring in the Series B warrants held by Alimentation Couche-Tard), we find the valuation attractive. Management is guiding for a NASDAQ listing in early calendar 2022.”

"The Tech Vision Should Drive Growth"

With the acquisition of Pineapple Express Delivery (an e-commerce delivery service in Canada), management expects to deliver a full suite of tech solutions (including the recent acquisitions of pot-guide and Wikileaf).

Zuanic noted that Pineapple Express is the industry leader in Canada, with 40,000 deliveries …

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