New Age Beverages Corporation (NASDAQ: NBEV) shares were¬†trading slightly higher Monday after an analyst report from Northland Capital Markets focused on the company’s latest acquisition and the passage of the federal Farm Bill.
Analyst¬†Mike Grondahl reiterated an Outperform on New Age Beverages and raised the price target from $6 to $8.
Northland’s higher price target is based on a number of recent developments surrounding New Age Beverages, Grondahl said in a Monday note.
The beverage maker completed the -million¬†acquisition of Morinda Holdings¬†Dec. 21.¬†
“The important point of the acquisition is how well NBEV can utilize the 160,000 direct-to-consumer¬†distribution points to sell other brands in the portfolio and especially NBEV’s CBD products,” the analyst said.¬†
In addition, the passage of the 2018 Farm Bill¬†‚ÄĒ¬†which legalized hemp and hemp-derived cannabidiol ‚ÄĒ¬†will create new opportunities for New Age Beverages, Grondahl said.¬†
The company said 125,000 locations (representing “numerous retailers”) have requested CBD products, and NBEV CBD products could hit the shelves in the near future, according to Northland.¬†
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Investors should still keep in mind the¬†FDA’s position on CBD, Grondahl said, although New Age Beverages’ products do not claim medicinal benefits.¬†
The CBD beverage maker also suggested that several large retailers have expressed¬†interest in its products, the analyst said. The company might be exploring partnerships with cannabis companies, he said.¬†¬†
Overall, Grondahl projects that with the acquisition of Morinda, New Age Beverages could generate around $325 million in revenue¬†and $30 million in adjusted EBITDA this year.¬†
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Latest Ratings for NBEV
|Aug 2018||Maxim Group||Maintains||Buy||Buy|
|Apr 2018||Maxim Group||Maintains||Buy||Buy|
|Nov 2017||Maxim Group||Maintains||Buy|
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