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Stock Strategist

Initiating Coverage of Green Thumb Industries

The cannabis producer offers investors attractive exposure to the fast-growing U.S. market.

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We are initiating coverage of Green Thumb Industries (GTBIF), a U.S. cannabis producer operating in 12 states. Our fair value estimates are $18 per share and CAD 23.50 per share, based on a 10-year explicit forecast that assumes a nearly 37% revenue CAGR and a 2028 operating margin before plant adjustments of 32%. At current prices, shares look undervalued as the stock trades in 4-star territory. In our view, it offers investors attractive exposure to the fast-growing U.S. market.

In line with our other cannabis coverage, we assign the firm a no-moat rating and a stable moat trend, as the probability of material value destruction over the next 10 years remains high. We also assign a very high uncertainty rating, which includes impacts from the pace at which legalization is passed, distribution is expanded, and the prevalence of cannabis consumption.

Kristoffer Inton does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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