How high can the Tilray Brands (TLRY) stock price reach?

Tilray Brands (NASDAQ: TLRY) stock price went parabolic on Tuesday as the recent momentum gained steam. The shares surged by more than 31%, making it one of the best-performing stocks in a day when all American indices are in the red.

Momentum continues

Tilray Brands share price has been in a strong bullish trend since July when it published encouraging financial results. This momentum continued on Tuesday when the company expanded its product offerings.

In a statement, Tilray Brands said that it will acquire 8 beer brands from AB InBev, the embattled beer giant. Some of these brands are Shock Top, HitBall Energy, and Square Mile Cider Company.

Tilray Brands now expects that its alcoholic beverage business will bring in over $300 million in revenue this year. In a statement, an executive at AB InBev said:

“Tilray Brands reached out to us early this year with interest in purchasing these brands and breweries, and since then, we’ve had many positive conversations that led to today’s announcement,”

The continued investments in the beverage industry comes at a time when the company’s cannabis business is going through major headwinds. Competition in the industry has soared while cannabis bills have mostly gone nowhere in Washington.

The most recent results showed that Tilray Brands’ revenue and cash flows improved in the last quarter. Its EBITDA came in at $61.5 million while its adjusted free cash flow (FCF) came in at $40 million.

Cannabis revenue dropped by 7% while its wellness revenue fell by 11%. Distribution revenue remained unchanged. These numbers show why the company is focused on expanding its product offerings to include alcoholic beverages. 

Analysts have a mixed opinion about the TLRY stock price. Those at CIBC, Piper Sandler, and Alliance Global recently downgraded their outlook for the shares while ATB Capital boosted their view.

Tilray Brands stock price forecast

The daily chart shows that the TLRY share price has been in a strong bullish trend in the past few months. The shares bottomed at $1.52 in July and is now hovering at $3. It has moved above the important resistance level at $2.63, the lowest swing in September last year.

The 25-day and 50-day moving averages have made a bullish crossover pattern. In price action analysis, this crossover is usually a bullish sign. It has also flipped the key resistance at $2.85 into a support level. This was an important level since it was the highest point on May 9th.

Therefore, the shares will likely continue rising in the long term as buyers target the key resistance level at $3.50. The stop-loss of this trade will be at $2.50