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Primo Brands (PRMB)
NYSE:PRMB

Primo Brands (PRMB) AI Stock Analysis

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Primo Brands

(NYSE:PRMB)

Rating:64Neutral
Price Target:
$35.00
▲(16.47%Upside)
Primo Brands' overall stock score reflects strong financial performance and strategic initiatives, particularly highlighted by robust earnings call outcomes and positive corporate events like the stock repurchase. However, the negative valuation metrics and bearish technical indicators weigh down the score, suggesting a cautious approach for investors.
Positive Factors
Growth Potential
The recent weakness in PRMB shares presents an opportune long-term entry point in an attractive growth story aligned with health and wellness trends.
Market Positioning
PRMB is poised to benefit from competitive dynamics as a pure-play water company with Coke and Pepsi de-emphasizing bulk water.
Weather Influence
Hotter and drier weather is expected to support better year-over-year growth for Primo Brands.
Negative Factors
Sales Performance
Scanned sales showed renewed weakness with a decline of -4.5% year-over-year.
Sales Volatility
The selloff in Primo Brands shares followed by a deceleration in scanner data suggests volatility and potential challenges in maintaining steady sales growth.
Weather Challenges
PRMB shares have been soft as wet and cool weather across the Northeast and Mid-Atlantic impacted consumption.

Primo Brands (PRMB) vs. SPDR S&P 500 ETF (SPY)

Primo Brands Business Overview & Revenue Model

Company DescriptionPrimo Water Corporation provides water direct to consumers and water filtration services in North America and Europe. It offers bottled water, purified bottled water, premium spring, sparkling and flavored water, mineral water, filtration equipment, and coffee; as well as water dispensers, and self-service refill drinking water. The company offers its products under the Primo, Alhambra, Crystal Rock, Mountain Valley, Deep Rock, Hinckley Springs, Crystal Springs, Kentwood Springs, Mount Olympus, Pureflo, Nursery, Sierra Springs, Sparkletts, Clear Mountain Natural Spring Water, Earth2O, Renü, Water Event Pure Water Solutions, Canadian Springs, Labrador Source, Decantae, Eden, Eden Springs, Chateaud'eau, and Mey Eden brands. It provides its services to residential customers, small and medium-sized businesses, and regional and national corporations and retailers. The company was formerly known as Cott Corporation and changed its name to Primo Water Corporation in March 2020. Primo Water Corporation was incorporated in 1955 and is headquartered in Tampa, Florida.
How the Company Makes MoneyPrimo Brands generates revenue through the sale of its eco-friendly consumer products across multiple channels, including direct-to-consumer e-commerce platforms, retail partnerships with major grocery and department stores, and wholesale agreements with specialty shops. The company's key revenue streams include product sales, private label manufacturing for other brands, and subscription services for recurring delivery of essential items. Partnerships with influential retailers and a strong online presence contribute significantly to its earnings by expanding market reach and enhancing brand visibility.

Primo Brands Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: -8.24%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Primo Brands' strong first-quarter performance with significant growth in net sales and EBITDA, driven by volume increases and successful cost synergy capture. Premium brands showed substantial growth, and the company is expanding distribution channels. However, challenges include the impact of a tornado on the Hawkins facility, minimal pricing contribution to sales growth, and tariff exposure on the dispenser business. Overall, the positive achievements outweigh the lowlights, leading to a favorable outlook.
Q1-2025 Updates
Positive Updates
Strong First Quarter Performance
Primo Brands reported a 3% increase in comparable net sales to $1.61 billion, driven by a 2.8% volume increase and price/mix growth of 0.2%. Normalized comparable net sales growth was 4.2% when accounting for the leap day impact.
Significant EBITDA Growth
Comparable adjusted EBITDA rose to $342 million, marking a 12.1% increase compared to the prior year, with a margin of 21.2%, up 170 basis points.
Premium Brands Surge
Premium brands, Saratoga and Mountain Valley, reported a combined 49% net sales growth. Saratoga was named the official water of the Golden Globes, and Mountain Valley received endorsements from professional athletes.
Expansion and Distribution Gains
Primo Brands is adding over 5% incremental points of distribution in mass and grocery channels, including new six-count PET versions of Mountain Valley and Saratoga Spring waters in Walmart.
Successful Cost Synergy Capture
Achieved approximately $20 million in synergies during the first quarter as part of a broader $200 million synergy goal for 2025, contributing to EBITDA growth.
Strong Cash and Liquidity Position
Primo Brands reported $1.1 billion in total liquidity, supported by strong cash flow generation and recent divestitures.
Negative Updates
Hawkins Facility Tornado Impact
The Hawkins, Texas facility experienced damage from a tornado, causing supply chain disruptions. The facility is expected to be fully operational by late June, with potential capital expenditures of $50 million.
Minimal Pricing Contribution
Price/mix growth was only 0.2%, indicating a reliance on volume for sales growth amidst a competitive pricing environment.
Dispenser Business Tariff Exposure
The dispenser business remains exposed to tariff changes, representing approximately 1% of annual net sales, requiring potential promotional activity to maintain velocity.
Company Guidance
During Primo Brands Corporation's First Quarter 2025 Earnings Conference Call, the company provided guidance indicating robust performance and strategic initiatives for the full year. The first quarter saw comparable net sales of $1.61 billion, a 3% increase driven by a 2.8% volume rise and a 0.2% price or mix growth. Organic growth contributed 2.6%, while inorganic growth added 0.4%. Adjusted EBITDA increased by 12.1% to $342 million, achieving a margin of 21.2%, which was a 170 basis point improvement over the prior year. The company reaffirmed its net sales guidance of 3% to 5% growth for 2025, boosted by new distribution and reset implementations. Cost synergy opportunities are expected to reach $200 million in 2025 and $300 million by 2026. Strategic focuses include brand leadership, net organic growth, superior customer service, and operational excellence, leveraging synergies and optimizing costs as the company integrates following a merger.

Primo Brands Financial Statement Overview

Summary
Primo Brands shows strong revenue growth and effective cash management, but faces profitability challenges and increased financial leverage. The negative net income and high debt-to-equity ratio require strategic cost control and debt management.
Income Statement
72
Positive
Primo Brands has shown strong revenue growth over the years, particularly from 2023 to 2024 with a 9.65% increase. However, the net profit margin turned negative in 2024, indicating profitability challenges despite the positive growth trend. The gross profit margin remains strong at 31.48% for 2024, but the decline in EBIT margin from 8.64% in 2023 to 7.00% in 2024 suggests increased operating expenses or cost pressures.
Balance Sheet
65
Positive
The company's debt-to-equity ratio has increased to 1.65 in 2024, indicating higher financial leverage and potential risk if market conditions change. Despite this, the equity ratio remains stable at 30.77%, reflecting a reasonable level of asset financing through equity. Return on Equity (ROE) has turned negative due to the net loss in 2024, which is a point of concern for shareholder returns.
Cash Flow
78
Positive
Primo Brands' cash flow metrics show resilience with a substantial increase in free cash flow by 164.52% from 2023 to 2024, indicating effective cash management. The operating cash flow to net income ratio is strong, suggesting high-quality earnings. However, the free cash flow to net income ratio in 2024 is negative due to the net loss, reflecting a need for caution in cash flow sustainability.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.15B5.15B4.70B4.44B1.58B1.95B
Gross Profit1.16B1.62B1.35B994.20M891.00M1.11B
EBITDA292.70M693.60M711.70M358.20M241.10M131.20M
Net Income-114.30M-16.40M92.80M-126.70M-3.20M-131.70M
Balance Sheet
Total Assets11.19B11.19B5.15B5.38B3.72B3.60B
Cash, Cash Equivalents and Short-Term Investments613.70M613.70M44.70M102.90M128.40M115.10M
Total Debt5.68B5.68B4.05B3.92B1.74B1.65B
Total Liabilities7.75B7.75B5.15B5.25B2.40B2.26B
Stockholders Equity3.44B3.44B2.70M134.60M1.32B1.35B
Cash Flow
Free Cash Flow128.50M272.90M103.20M-228.40M135.70M52.90M
Operating Cash Flow267.10M463.80M320.90M108.30M256.90M176.20M
Investing Cash Flow-211.10M474.40M-217.60M-319.40M-240.90M-178.00M
Financing Cash Flow42.40M-362.90M-162.30M-147.70M-800.00K-91.10M

Primo Brands Technical Analysis

Technical Analysis Sentiment
Negative
Last Price30.05
Price Trends
50DMA
31.12
Negative
100DMA
32.05
Negative
200DMA
30.31
Negative
Market Momentum
MACD
-0.27
Negative
RSI
47.38
Neutral
STOCH
73.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRMB, the sentiment is Negative. The current price of 30.05 is above the 20-day moving average (MA) of 29.74, below the 50-day MA of 31.12, and below the 200-day MA of 30.31, indicating a neutral trend. The MACD of -0.27 indicates Negative momentum. The RSI at 47.38 is Neutral, neither overbought nor oversold. The STOCH value of 73.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PRMB.

Primo Brands Risk Analysis

Primo Brands disclosed 55 risk factors in its most recent earnings report. Primo Brands reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Primo Brands Peers Comparison

Overall Rating
UnderperformOutperform
Sector (50)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$11.79B145.149.19%-5.98%-65.57%
78
Outperform
$4.37B22.8637.23%0.81%5.51%
77
Outperform
$10.11B20.1736.83%0.86%3.21%31.84%
KOKOF
74
Outperform
$5.17B16.4817.12%1.88%1.54%4.48%
KDKDP
72
Outperform
$46.22B30.826.13%2.70%3.95%-28.73%
64
Neutral
$11.56B20.07-2.83%1.31%90.28%-105.48%
50
Neutral
AU$2.24B-0.25-14.39%12.25%7.38%-60.19%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PRMB
Primo Brands
30.05
9.92
49.28%
KOF
Coca Cola Femsa SAB De CV
89.67
7.19
8.72%
COKE
Coca-Cola Bottling Co Consolidated
113.32
5.72
5.32%
KDP
Keurig Dr Pepper
33.65
2.56
8.23%
FIZZ
National Beverage
44.88
-4.97
-9.97%
CELH
Celsius Holdings
46.10
-10.81
-18.99%

Primo Brands Corporate Events

Executive/Board Changes
Primo Brands Announces Board Resignations Amid Stock Changes
Neutral
May 21, 2025

On May 19, 2025, Primo Brands Corporation announced the resignation of Kurtis Barker and Allison Spector from its Board of Directors following a decrease in ownership of the company’s Class A common stock by the ORCP Stockholders. The resignations, effective May 21, 2025, were not due to any disagreements with the company. Subsequently, the Board reduced its size to eleven directors, eliminating the vacancy for a Mutually Agreed Director as requested by the Initial ORCP Stockholder.

The most recent analyst rating on (PRMB) stock is a Buy with a $33.00 price target. To see the full list of analyst forecasts on Primo Brands stock, see the PRMB Stock Forecast page.

Stock BuybackBusiness Operations and Strategy
Primo Brands Completes Stock Repurchase Agreement
Positive
May 12, 2025

On May 7, 2025, Primo Brands Corporation entered into a stock purchase agreement to repurchase 3,157,562 shares of its Class A common stock from affiliates of One Rock Capital Partners. The repurchase closed on May 12, 2025, concurrently with a secondary offering by the same affiliates, who sold 47,500,000 shares, garnering approximately $1.5 billion in proceeds. This strategic move, involving no direct sale of shares by Primo Brands, signifies a consolidation of its stock and potentially strengthens its market position by reducing the number of outstanding shares.

The most recent analyst rating on (PRMB) stock is a Hold with a $20.00 price target. To see the full list of analyst forecasts on Primo Brands stock, see the PRMB Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 03, 2025