With CannTrust’s (CannTrust Stock Qupte, Chart TSX:TRST) announcement that it has launched three new cannabis extract formulations, analyst Russell Stanley of Beacon Securities is staying bullish on the cannabis company, saying TRST still trades at a marked discount to its peers.

On Wednesday, Stanley reiterated his “Buy” recommendation and $15.00 target price, representing a projected 12-month return of 51 per cent at the time of publication.

On Wednesday morning, Canadian LP CannTrust announced the three new formulations, geared at meeting the growing demand for cannabis oil in the medical marijuana market. One is a high-dose CBD capsule, another is high-dose CBD in drop formula and the third is a low-dose 1:1 CBD and THC capsule.

In his note to clients, Stanley points out that extract products have a number of advantages over smokable products (more dose control and easier to administer, for example) and that CannTrust’s focus on extracts has done well by them so far.

“CannTrust has traditionally been a market leader in extract/oil sales, with management estimating its market share at 27 per cent for Q4/18. Moreover, we believe development of higher value products will be a critical driver of success as new product forms are legalized (e.g. edibles, beverages, etc). CannTrust’s continued leadership here bodes well for the company’s success on that front,” he says.

Stanley maintains that TRST is trading at 15x his 2020 EBITDA estimate, which represents a 61-per-cent discount to the 38x average among cannabis companies with a $1 billion-plus market cap. He says that TRST also trades at a 78-per-cent discount to the 67x average at which US-listed cannabis companies trade.

The analyst notes that the stock seems to have “found its footing” after the market responded negatively to the company’s Q4/18 financial results.

“The company has made solid progress on developing its outdoor grow initiative and management is predicting a meaningful contribution from its first outdoor harvest in 2019, which should make our forecasts for this year very achievable,” says Stanley. “We continue to view TRST as one of a select few Canadian producers that offers low-cost production potential with demonstrated strength in developing higher value products.”