Jefferies Thinks This Pot Stock Could Pop 75%

The analyst just gave Aphria a "buy" rating and an $11.16 price target

Jefferies just initiated coverage on cannabis concern Aphria Inc (NYSE:APHA) with a "buy" rating and price target of $11.16 -- a nearly 75% premium to last night's close at $6.41. The analyst said it was impressed by APHA's business approach to recreational marijuana, and that the stock's valuation doesn't reflect its strong global outlook. It also said issues that have pressured the shares -- such as a recent accusation of insider trading -- are quickly becoming hindsight. APHA is up 5.2% at $6.73 in response -- pacing for its best day in weeks.

The brand-new "buy" rating is in good company, with all five analysts already covering the stock chiming in with a "buy" or better. Plus, the consensus 12-month target price is all the way up at $11.90 -- a level the equity hasn't reached since mid-November.

Since bottoming out a record low of $3.75 in early December, the stock staged an impressive rally before running out of steam near the $11 region. The shares fell prey to a post-earnings bear gap in mid-April, breaching short-term support at their 50-day moving average. While downward pressure from its 20-day average has kept a lid on APHA of late, the stock is still up over 18% this year.

Meanwhile, the Canadian stock is still being heavily shorted, with short interest rising 26% in the last reporting period. Now, the 17.71 million shares sold short represent a healthy 7.1% of the stock's available float, or three times APHA's average pace of trading. Should some of these bearish bets begin to unwind, even more tailwinds could appear on the charts for Aphria.