High Tide become FCF positive would be a stock catalyst-ATB

High Tide

21/03/2023 11:23

** ATB lowers Canada-based cannabis retailer High Tide Inc's
 HITI.V  PT to C$6 from C$6.50, driven by lower estimates
    ** ATB reduces store count estimate to 158 by end of FY2023,
from 175, which in turn drives lower sales est of $477.1 mln
from $478 mln
    ** HITI cut 2023 new stores growth to 10-20 from 40-50, and
issued guidance for positive FCF within the year
    ** ATB says HITI achieving FCF target could be a stock
catalyst as it could lower cost of capital and trigger multiple
expansion
    ** Adds that it views shift in strategic focus from growth
to profitability as positive, given the subdued share price and
current capital market conditions
    ** Q1 '23 results showcase the success of HITI's discount
club model as same-store sales grew 4% q/q and 52% y/y - ATB
    ** 3 of 4 brokerages rate the stock "buy" or higher and 1
"hold"; their median PT is C$5.80
    ** Up to Monday's close, stock had fallen 24% YTD

 (Reporting by Arshreet Singh in Bengaluru)
 ((Arshreet.Singh@thomsonreuters.com))