A splashy new deal with Shoppers Drug Mart isn’t shaking GMP Securities analyst Martin Landry’s view that Aphria (TSX:APH) is more than fully valued at current levels.

On Monday, Aphria announced that it had entered into an agreement that will see it become a medical cannabis supplier to Shoppers Drug Mart, a retail pharmacy chain that has more than 1200 locations in Canada.

“We have an impeccable record cultivating and producing high-quality, medical-grade cannabis,” said Aphria CEI Vic Neufeld. “These traits make us a strong partner for an organization looking to serve and support Canadian patients.”

While he says that this deal will likely bring significant brand awareness to Aphria, Landry notes that the LP’s shares have been on a tear this fall, making it hard for him to recommend the stock at these levels.

“While today’s news is positive for Aphria and provides some visibility on end markets, we believe it is already reflected in the company’s stock price, which has increased by 38% in the last month,” the analyst says. “Aphria trades at a premium of 25% to senior LPs, adequately reflecting its outlook, in our view. We are raising our target price on APH based on higher forecasts and a lower discount rate, to reflect the company’s increasing market capitalization. Our target is derived from a DCF analysis using: (1) a discount rate of 8.5% (9% previously), (2) average recreational market share of 9%, (3) average EBITDA margin of 28%, and (3) a terminal growth of 3%.”

In a research update to clients today, Landry maintained his “Hold” rating on Aphria, but raised his one-year price target on the stock from $7.75 to $10.00, implying a return of negative 13.9 per cent at the time of publication.

Landry thinks Aphria will generate EBITDA of $15.2-million on revenue of $47.3-million in fiscal 2018. He expects those numbers will improve to EBITDA of $62.7-million on a topline of $168.6-million the following year.