Shares of Aurora Cannabis (NYSE:ACB) surged nearly 22% last month, according to data from S&P Global Market Intelligence, after the Canadian marijuana company received bullish analyst commentary and announced the appointment of a new strategic advisor.
On March 5, investment firm Cowen named Aurora Cannabis its top pick in the marijuana industry and gave it a $10.50 price target. Cowen's analysts highlighted Aurora's leading production capacity and broad international presence.
"The company's large cultivation footprint, capable of producing over 575,000 kg, provides ACB with the necessary infrastructure to weather early storms in adult use while continuing to grow higher-value revenues in the medical market," Cowen said in its report.
Then on March 13, Aurora announced that it had appointed billionaire Nelson Peltz as a strategic advisor. Peltz will help Aurora "explore potential partnerships that would be the optimal strategic fit for successful entry into each of Aurora's contemplated market segments," the company said in a press release.
Peltz's history as an activist investor and contacts within the consumer goods industry could finally help Aurora find the partner it's been searching for. A partnership with a major consumer goods company could inject much-needed capital into Aurora's coffers. It would also help to place it on more equal footing with peers like Canopy Growth and Cronos Group, which have already partnered with beer and tobacco giants Constellation Brands and Altria, respectively.
Still, the possibility of a new partnership may already be priced into Aurora's stock to some extent. As of today, Aurora's shares are already up 77% so far this year.
Investors also appear to be growing increasingly excited about the moves Aurora is making to boost its production capacity, and, therefore, its future profit potential. Moreover, international expansion and an eventual move into the U.S. hemp market could serve as additional growth catalysts for Aurora Cannabis in the quarters ahead.
Dilution remains a concern, but that hasn't stopped Aurora Cannabis from delivering incredible returns to investors in recent years.
All told, an investment in Aurora Cannabis comes with plenty of risk, but this Canadian producer is likely to remain one of the more intriguing growth stories within the booming marijuana market in the years ahead.