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Primo Brands (PRMB)
NYSE:PRMB
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Primo Brands (PRMB) AI Stock Analysis

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PRMB

Primo Brands

(NYSE:PRMB)

Rating:52Neutral
Price Target:
$24.00
▼(-2.20% Downside)
Primo Brands faces significant challenges with profitability and technical indicators suggesting bearish momentum. While there are positive aspects such as strong cash flow management and a high dividend yield, the negative P/E ratio and operational disruptions weigh heavily on the overall score. The earnings call provides some optimism with synergy capture and premium sales growth, but risks remain.
Positive Factors
Financial Performance
The company's premium bottled water brands and its exchange and refill business all grew at rates accretive to corporate target.
Investment Recommendation
Analyst's recommendation is to buy PRMB stock with a price objective of 39.00 USD, indicating potential for growth from the current price.
Market Position
Primo is structured to capitalize on secular demand for bottled water as a better-for-you and safer alternative to sugary or otherwise processed beverages.
Negative Factors
Execution Risk
There is continued execution risk and acknowledgment that implied 4Q guidance doesn't leave a lot of room for error.
Guidance Revision
Management reduced its guidance for full-year sales and earnings, which are below current estimates.
Weather Impact
Ozarka was negatively impacted by flooding in Texas, affecting its sales performance.

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 multiple streams, primarily by selling its consumer products to retailers and wholesalers across different channels, including grocery stores, e-commerce platforms, and specialty shops. The company benefits from brand loyalty and repeat purchases, which contribute to a stable revenue base. Additionally, Primo Brands engages in strategic partnerships with distributors and retailers to enhance product visibility and accessibility. Key revenue streams also include private label products and co-branding initiatives, which allow the company to leverage its manufacturing capabilities while catering to specific market segments. Seasonal promotions, marketing campaigns, and product launches further drive sales, enhancing overall profitability.

Primo Brands Earnings Call Summary

Earnings Call Date:Aug 07, 2025
(Q2-2025)
|
% Change Since: -7.08%|
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with significant achievements in premium water sales growth and synergy capture, but also highlighted operational challenges from the integration process and weather-related sales impacts.
Q2-2025 Updates
Positive Updates
Premium Water Channel Growth
Primo Brands reported a 44.2% year-over-year net sales growth in the premium water channel, with Mountain Valley and Saratoga contributing significantly to this increase. The brands expanded their presence in Walmart and other key retail channels, and new production facilities are being built to meet demand.
Synergy Capture on Track
Primo Brands is on pace to achieve approximately $200 million in synergies for 2025, with an expected increase to $300 million by the end of 2026. The integration efforts have already led to significant facility closures and headcount reductions.
Strong Liquidity Position
The company maintains strong liquidity with approximately $1 billion available, including $412 million of unrestricted cash and $612 million under a revolving credit facility.
Expansion of Distribution Network
Primo Brands grew its total points of distribution over 10% in the second quarter, with notable gains in retail channels.
Negative Updates
Tornado Impact on Production
A tornado significantly damaged a Primo Brands facility in Hawkins, Texas, reducing second quarter net sales by approximately $26 million.
Integration Disruptions
The merger integration led to disruptions in product supply and service, particularly in the direct delivery business. This resulted in missed deliveries, reduced inventory levels, and increased customer complaints.
Softness in Retail Sales Due to Weather
Colder and wetter weather in key markets, such as the Northeast, negatively impacted retail sales, particularly affecting the Poland Springs market.
Office Coffee Service Wind Down
Primo Brands is winding down its office coffee service (OCS) business, contributing to a net sales decline of approximately $6 million in the second quarter.
Company Guidance
During the Primo Brands Corporation Second Quarter 2025 Earnings Conference Call, the company provided guidance reflecting a cautious yet optimistic outlook for the remainder of the year. Primo Brands revised its full-year comparable net sales growth expectations to between flat and 1%, acknowledging disruptions caused by a tornado impact, integration challenges, and adverse weather conditions. The company anticipates delivering approximately $200 million in synergies by year-end 2025, increasing to $300 million by the end of 2026. Despite these headwinds, the company remains confident in achieving a comparable adjusted EBITDA margin of 22.2% for 2025, a slight reduction from the original guidance. Primo Brands also maintained its commitment to a long-term growth algorithm of 3% to 5% organic net sales and reinforced its synergy capture targets, aiming for $1.5 billion in adjusted EBITDA for the year. With a significant focus on stabilizing operations and optimizing customer service, the company believes it is positioned to resume growth and improve margins in the upcoming quarters.

Primo Brands Financial Statement Overview

Summary
Primo Brands shows strong revenue growth and cash flow management, but faces challenges with profitability and leverage. The income statement reflects positive sales trends, while the balance sheet highlights financial risks due to high debt levels. The cash flow statement indicates solid liquidity and operational cash management.
Income Statement
65
Positive
Primo Brands shows a mixed performance in its income statement. The company achieved a gross profit margin of 31.5% in the latest year, indicating a strong ability to cover its cost of goods sold. However, the net profit margin is negative due to a net loss, highlighting profitability challenges. Revenue growth was robust at 9.6% year-over-year, suggesting positive sales momentum. The EBIT margin of 7.0% and EBITDA margin of 13.5% reflect moderate operational efficiency.
Balance Sheet
58
Neutral
The balance sheet of Primo Brands reveals a high debt-to-equity ratio of 1.65, indicating significant leverage and potential financial risk. The return on equity is negative due to the net loss, which is a concern for investors. However, the equity ratio stands at 30.8%, suggesting a reasonable proportion of assets financed by equity. Overall, the balance sheet shows a need for improved financial stability.
Cash Flow
72
Positive
Primo Brands demonstrates strong cash flow management with a free cash flow growth rate of 164.5% year-over-year, indicating improved cash generation. The operating cash flow to net income ratio is 28.3, reflecting efficient cash conversion from operations despite the net loss. The free cash flow to net income ratio is 16.6, suggesting effective cash retention. Overall, the cash flow statement indicates solid liquidity and operational cash management.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue6.05B5.15B4.70B4.44B1.58B1.95B
Gross Profit1.91B1.62B1.35B994.20M891.00M1.11B
EBITDA797.40M693.60M711.70M358.20M241.10M131.20M
Net Income-48.10M-16.40M92.80M-126.70M-3.20M-131.70M
Balance Sheet
Total Assets11.05B11.19B5.15B5.38B3.72B3.60B
Cash, Cash Equivalents and Short-Term Investments412.00M613.70M44.70M102.90M128.40M115.10M
Total Debt5.73B5.68B4.05B3.92B1.74B1.65B
Total Liabilities7.80B7.75B5.15B5.25B2.40B2.26B
Stockholders Equity3.25B3.44B2.70M134.60M1.32B1.35B
Cash Flow
Free Cash Flow176.70M272.90M103.20M-228.40M135.70M52.90M
Operating Cash Flow329.50M463.80M320.90M108.30M256.90M176.20M
Investing Cash Flow480.80M474.40M-217.60M-319.40M-240.90M-178.00M
Financing Cash Flow-496.00M-362.90M-162.30M-147.70M-800.00K-91.10M

Primo Brands Technical Analysis

Technical Analysis Sentiment
Negative
Last Price24.54
Price Trends
50DMA
28.44
Negative
100DMA
30.66
Negative
200DMA
30.62
Negative
Market Momentum
MACD
-1.37
Positive
RSI
26.77
Positive
STOCH
39.67
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 24.54 is below the 20-day moving average (MA) of 26.65, below the 50-day MA of 28.44, and below the 200-day MA of 30.62, indicating a bearish trend. The MACD of -1.37 indicates Positive momentum. The RSI at 26.77 is Positive, neither overbought nor oversold. The STOCH value of 39.67 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 (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$9.97B19.1141.45%5.25%3.22%23.88%
74
Outperform
$4.22B22.4637.23%0.81%5.51%
74
Outperform
$47.04B30.726.18%2.65%4.63%-28.22%
71
Outperform
$14.62B157.987.91%11.85%-64.69%
66
Neutral
$4.41B14.6716.78%3.96%-4.05%-3.69%
61
Neutral
€10.38B11.37-5.16%3.57%-1.37%-1399.31%
52
Neutral
$9.18B20.07-2.15%4.89%162.92%-107.26%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PRMB
Primo Brands
24.54
3.38
15.97%
KOF
Coca Cola Femsa SAB De CV
84.12
-2.50
-2.89%
COKE
Coca-Cola Bottling Co Consolidated
113.05
-13.36
-10.57%
KDP
Keurig Dr Pepper
34.78
0.11
0.32%
FIZZ
National Beverage
44.78
-1.22
-2.65%
CELH
Celsius Holdings
57.30
15.74
37.87%

Primo Brands Corporate Events

Executive/Board Changes
Primo Brands Announces Executive Role Changes
Neutral
Aug 6, 2025

On July 31, 2025, Primo Brands Corporation announced changes in its executive roles as part of the ongoing integration with Triton Water Parent, Inc. The company decided to combine the roles of General Counsel and Chief Administrative Officer, resulting in Marni Poe stepping down as General Counsel effective August 6, 2025. Hih Song Kim will take over as Chief Legal Officer and Corporate Secretary. Ms. Poe will assist with the transition until August 29, 2025, and will receive compensation according to the company’s severance and equity plans. Additionally, her equity awards will continue to vest in recognition of her contributions.

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.

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.

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: Aug 11, 2025