Curaleaf (CURLF) PT Lowered to $1 at Craig-Hallum

Craig-Hallum analyst Eric Des Lauriers lowered the price target on Curaleaf (OTC: CURLF) to $1.00 (from $2.50) while maintaining a Hold rating.

The analyst commented: "Curaleaf is the largest cannabis operator by revenue and is poised to benefit from eventual federal reform, and, unique among US cannabis operators, expansion of the European market. As pricing pressure continued to be a significant headwind in the industry (average price compression of ~14% in 2024, according to management), Curaleaf focused on stabilizing the business in the past two quarters. Now it is continuing ahead with a “Return to our ROOTS” initiative, which continues focusing on optimizing margins and cash flow and reducing debt while also driving organic growth. International markets, NY, OH and hemp-derived products will continue to be the primary drivers of organic growth in 2025. A push to increase the mix of premium quality flower will also provide a tailwind to revenues given the company was under indexed in this category in key markets like FL and AZ; however, this mix shift should also help improve margins and cash flow, which will help reduce debt over time. Given virtually of the capex required for increasing flower quality has been invested, and the company is seeing notable improvements in quality, we are encouraged by what this could mean for the outlook for shares. However, we remain in a wait-and-see mode given mixed track record and poor sector-wide investor sentiment. We are maintaining our Hold rating while lowering our price target to $1.00, which represents an EV (including uncertain tax liability as debt) of 8.8x our 2026 adj. EBITDA estimate of $283MM."

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