Aphria (APHA) flew as high as 15.7% on Friday before the buzz started to wear off. The stock mellowed to a 2.6% gain on the day. The ride in the sky was due to several analysts raising their price targets on the company, which tends to happen just after a successful quarterly results release.
On Thursday, Aphria unveiled its Q2 of fiscal 2021 earnings, revealing good top-line growth that beat analyst estimates. The company also managed to deliver a surprise: It eked out a small net profit on a non-IFRS (adjusted) basis, a rare feat in the ever-struggling marijuana industry.
This adds to the company's positive momentum. In December, it announced that it's effectively acquiring Canadian peer Tilray. It's also pushing assertively into the cannabis-laced beverages market with the November acquisition of American beer maker SweetWater Brewing Company.
On the back of these developments, Pablo Zuanic of Cantor Fitzgerald upped his price target on Aphria to 26 Canadian dollars ($20.52) from the previous CA$15.25 ($12.04). He gave the stock an overweight (buy) rating. Several peers followed suit, albeit to more modest levels. One example is Matt Bottomley of Canaccord Genuity raised his target to CA$17.50 ($13.81); previously, it was CA$11 ($8.68).
At the moment, Aphria has some of the strongest tailwinds in the marijuana industry. Investors will be hoping for these to keep propelling the company's fundamentals higher.