HEXO Pot Stock Rises Over 10% Thanks to Wall Street’s Buyer Status Support

Cannabis stocks are expected to gain some traction as new regulations are imposed on this industry. However, Hexo Corp. received an unexpected jump in their own stock, rising by 11% on Friday. According to reports from news media website Mugglehead, the rise can be credited to Wall Street.

Bill Kirk, an analyst from MKM Partners, recently published a note titled “Don’t Smoke the Kool-Aid,” covering five cannabis companies in Canada and two operators that cover multiple states in the US. The analyst states that there’s a possibility of commoditizing pot cultivators for a less profitable result, he believes in Hexo’s building of their brand

Hexo earned a “buy” rating from Kirk, aiming to reach $12 per share within the next year. This jump would push up the Thursday price of $5.24 by 129%.

Kirk stated, “We believe HEXO’s approach to be the working component of expert partners’ products has the best chance of creating a defensible brand.”

With this recommendation, the stock rose. This is a direct contrast to what the stock has experience since March, dropping by approximately 35% from then to now.

Cannabis Technology Company HEXO is Partnering with Fortune 500 Brands to Become a Top 3 Global Player https://t.co/5HKm5Tu7nR pic.twitter.com/6TyxGIn7IA

— HEXO Corp (@Hexocorp) August 19, 2019

Along with the confidence that Kirk expressed in the brand power of Hexo, the analyst commented on the goal of the company to reach $400 million in revenue next year, which he believes investors should be more excited about. Their balance sheet reflects around $171 million in their vault, only featuring $30 in debt, according to Kirk.

While Kirk is confident, others are more skeptical. After all, the company only posted $13 million in sales in this quarter, and the net revenue has only reached $32 million through the last three quarters. However, Fiscal 2020 starts soon – let’s see how Hexo does.