Last Update 17 May 26

TLRY: BrewDog Deal And Cannabis Rescheduling Will Shape Future Upside Potential

Analysts have trimmed their average price target on Tilray Brands by a few dollars to reflect updated assumptions around discount rates, profit margins and future P/E multiples, even as some highlight potential benefits from partial cannabis rescheduling and recent acquisitions.

Analyst Commentary

Bullish Takeaways

Bullish analysts view the partial cannabis rescheduling order as extremely favorable, seeing scope for improved sector sentiment and potential support for valuation multiples if regulatory risk is perceived as lower.
The recent upgrade from one research firm signals that some on the Street see the current setup as attractive relative to their revised assumptions on discount rates, profit margins and future P/E multiples.
On the BrewDog asset acquisition, bullish analysts point to the opportunity for Tilray to capture synergies, arguing that successful integration could help drive operating efficiency and support longer term growth ambitions.
Supportive commentary around the BrewDog deal highlights that, if execution is solid, the acquisition could broaden Tilray's revenue base and provide additional levers for margin improvement over time.

Bearish Takeaways

Several bearish analysts have trimmed their price targets in both US$ and C$, reflecting more cautious assumptions on profitability and the multiples they are willing to apply to Tilray's earnings outlook.
The repeated cuts in targets following the BrewDog acquisition underline concern about execution risk, with some bearish analysts questioning Tilray's ability to turn around trends and fully realize the expected synergies.
Lowered targets from multiple firms suggest lingering skepticism around how quickly any benefits from partial cannabis rescheduling or recent acquisitions might translate into consistent earnings performance.
Overall, the target reductions indicate that, despite some positive catalysts, a portion of the Street is still applying a more conservative stance on valuation, particularly around margins and return on recent investments.

What's in the News

Tilray is reported to be close to a GBP 40m deal to acquire most of BrewDog, including core brands and key brewing assets, while Tilray shares were halted pending news (Sky News).
The Trump administration is expected to move forward with reclassifying cannabis, a potential regulatory shift that could influence sector sentiment for companies such as Tilray (Axios).
A large review in The Lancet found limited evidence that cannabis-based medicines are effective for most mental health and substance-use disorders, with Tilray and several peers cited among publicly traded companies in the sector (Reuters).
Tilray launched PORTAL, a new high potency cannabis brand focused on seasoned, high tolerance consumers, with initial products including liquid diamond vapes and infused pre-rolls in Canada.
Tilray expanded its medical cannabis portfolio in Australia through Tilray Medical, adding new formats under the Redecan and Good Supply brands to support broader patient access.

Valuation Changes

Fair Value: $10.04 is unchanged, with the updated estimate matching the prior figure.
Discount Rate: has risen slightly from 6.79% to 6.92%, indicating a modestly higher required return in the model.
Revenue Growth: effectively flat, with the assumption holding around 11.98%.
Net Profit Margin: has fallen from 19.19% to 17.99%, reflecting a slightly more cautious view on future profitability.
Future P/E: has increased from 7.25x to 7.76x, implying a somewhat higher valuation multiple applied to projected earnings.

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Key Takeaways

Expansion in Europe and category diversification are driving strong growth, margin improvements, and long-term revenue potential as global cannabis markets develop.
Operational efficiencies and a solid financial position support continued cost optimization, strategic acquisitions, and international market entry for ongoing earnings growth.
Persistent regulatory hurdles, market pressures, and industry headwinds continue to constrain Tilray's revenue growth, profitability, and exposure to solvency and dilution risks.

Catalysts

About Tilray Brands

A lifestyle consumer products company, engages in the research, cultivation, processing, and distribution of medical cannabis products in Canada, the United States, Europe, the Middle East, Africa, and internationally.What are the underlying business or industry changes driving this perspective?

Tilray's international cannabis business is achieving rapid organic growth, with European cannabis revenue up 112% YoY (excluding Australia) and significant share gains in Germany due to regulatory tailwinds, broader medical adoption, and expanding legalization-supporting a long runway for top-line revenue acceleration as global cannabis markets open.
Sustained innovation and consumer focus in wellness, energy drinks, non-alcoholic beverages, and hemp-based foods positions Tilray to capture the surge in demand for plant-based, functional, and health-oriented products, which should drive diversified, higher-margin revenues and gross margin expansion.
Operational scale from strategic acquisitions (craft beer/spirits) and production footprint consolidation (now 90% in-house) is enabling continued cost optimization, SKU rationalization, and manufacturing efficiency, translating into stronger gross/net margins and improved EBITDA in upcoming periods.
Ongoing consolidation and stabilization in Canada's cannabis sector and a shift toward higher-margin SKUs (e.g., premium flower, beverages, edibles) are reducing price compression and illicit market share, while regulatory reforms (potential for broader retail/access, excise tax changes) offer future revenue and profitability upside.
Tilray's robust balance sheet, substantial cash reserves, and ongoing debt reduction afford flexibility to pursue geographic expansion, new international market entries in Europe/Middle East/Asia, and opportunistic acquisitions-enhancing long-term earnings growth and financial resilience.

Tilray Brands Earnings and Revenue Growth

Tilray Brands Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Tilray Brands's revenue will grow by 12.0% annually over the next 3 years.
Analysts are not forecasting that Tilray Brands will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Tilray Brands's profit margin will increase from -156.7% to the average CA Pharmaceuticals industry of 18.0% in 3 years.
If Tilray Brands's profit margin were to converge on the industry average, you could expect earnings to reach $216.7 million (and earnings per share of $1.57) by about May 2029, up from -$1.3 billion today.
In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 7.8x on those 2029 earnings, up from -0.5x today. This future PE is lower than the current PE for the CA Pharmaceuticals industry at 14.8x.
Analysts expect the number of shares outstanding to grow by 5.8% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.92%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

Persistently slow and uncertain progress on U.S. cannabis legalization continues to limit Tilray's addressable market, with management citing that "U.S. regulatory changes have not advanced the way we'd hoped," which has suppressed share price, led to multi-billion dollar impairment charges, and risks continued stagnation in revenue and market cap.
Ongoing price compression, illicit market competition, and heavy excise tax burdens in the Canadian cannabis market have significantly impacted revenues-management noted price compression cost over $250 million in five years-potentially limiting future revenue growth and constraining margins.
Softness and overall decline in industry-wide craft beer demand, combined with "SKU rationalization," missed distribution resets, and adverse weather, resulted in weaker-than-expected beverage revenues; persistent headwinds or further category contraction will negatively impact Tilray's diversified revenue and gross margin.
Long-term lack of operating profitability is evidenced by continued net losses (a net loss of $2.2 billion in FY 2025, with $31 million in cash losses from operations) and negative free cash flow (negative $114 million FY 2025), highlighting challenges in achieving structural cost efficiency and sustainable earnings, and heightening dilution or solvency risk.
Increased regulatory risk in international core markets, such as potential restrictive legislation in Germany (e.g., limiting telemedicine or mail-order medical cannabis), can disrupt access, pricing, or demand and limit the scalability of high-margin international revenues that management is relying on for future growth.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $10.04 for Tilray Brands based on their expectations of its future earnings growth, profit margins and other risk factors.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $24.0, and the most bearish reporting a price target of just $6.5.
In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be $1.2 billion, earnings will come to $216.7 million, and it would be trading on a PE ratio of 7.8x, assuming you use a discount rate of 6.9%.
Given the current share price of $5.32, the analyst price target of $10.04 is 47.0% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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