Aphria (APHA) has become a favored marijuana stock lately, due to better-than-expected quarterly results and the looming merger with peer Tilray (TLRY). On Tuesday, a prominent analyst added to that positive sentiment with a significant price target raise.

That analyst, W. Andrew Carter of Stifel, lifted his price to 15.50 Canadian dollars ($12.14), up from the previous C$9.80 ($7.67). While doing so, however, he maintained his neutral rating on the stock.

The prognosticator believes that those second-quarter results "underscore Aphria's position of strength," despite a decline in sales for the company's key Canadian recreational marijuana segment. Stifel is maintaining its hold rating on the stock because subsequent price appreciation (based also on the prospects for the U.S. decriminalizing marijuana at the Federal level) limits the stock's potential to outperform.

Cannabis flower and vape pen.

Image source: Getty Images.

Vice president-elect Kamala Harris has pledged that her administration will take this step, although it will likely have greater priorities such as the national response to the coronavirus pandemic, and the reversal of certain policies enacted by the outgoing Trump administration.

Regardless of when or if the U.S. flips the switch on weed, Aphria is setting itself up to be a major North American marijuana company. In addition to its tie-up with Tilray (which is effectively a takeover, even though the combined businesses will adopt the Tilray name), Aphria is bulking up with other assets. In November, it announced it was buying SweetWater Brewing, a maker of cannabis-flavored beer, for roughly $300 million.

Investors were clearly encouraged by Carter's price target boost. They bid up Aphria by almost 10% on Tuesday, despite the analyst's insistence on maintaining the hold recommendation. By contrast, the S&P 500 inched up by less than 1% on the day.