Tilray Brands seen creating long-term value through diversified platform, Jefferies says

Tilray Brands seen creating long-term value through diversified platform, Jefferies says Proactive uses images sourced from Shutterstock

Tilray Inc (NASDAQ:TLRY) is making progress in its transition into a diversified consumer products company, according to Jefferies, which reiterated its 'Buy' rating while lowering its price target to $19 from a higher prior target after cutting earnings forecasts.

Shares traded up almost 3% at about $4 on Thursday afternoon

The firm reduced its fiscal 2027 and 2028 EBITDA estimates after management guided to fiscal 2027 adjusted EBITDA of $68 million to $75 million, below the consensus estimate of $84 million.

Jefferies now forecasts fiscal 2027 adjusted EBITDA of $75.5 million, down from its previous estimate of $92.1 million.

The analysts noted that Tilray reported quarterly revenue of $282 million, ahead of the consensus estimate of $253 million, supported by growth across beverage alcohol, cannabis, distribution and wellness. They wrote that the results provided "a cleaner look at what the business can look like with BrewDog included," with beverage alcohol becoming a significantly larger contributor to the overall platform.

The firm said the company's transformation over the past year has shifted the investment story beyond cannabis, with Tilray Inc (NASDAQ:TLRY)reasingly becoming a diversified consumer company with multiple growth opportunities.

While lowering its earnings forecasts to reflect a slower profitability ramp, Jefferies said it continues to see upside from BrewDog, the company's Carlsberg partnership and international medical cannabis operations, although integration and investment are expected to weigh on near-term earnings.

Jefferies described the next few months as a period of mixed execution, with improving revenue momentum but a need to demonstrate the ability to scale its beverage business. Over an 18-month horizon, the brokerage maintained a positive outlook, citing improving beer margins, BrewDog's contribution, expanding beverage opportunities through Carlsberg and growth in international medical cannabis.

The firm added that Tilray's balance sheet and brand portfolio position it to benefit from favourable developments in the US cannabis regulatory environment while providing flexibility for future acquisitions.

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