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On Wednesday, Barclays (LON:BARC) analysts initiated coverage on Primo Brands Corp. (NYSE: PRMB), a $5.1 billion market cap company, with an Overweight rating, setting a price target of $40.00. Currently trading at $31.88, the stock has shown impressive momentum with a 47% return over the past year. The analysts highlighted Primo Brands as an appealing consolidation story within the food and beverage sector, noting its resilience against several structural challenges affecting other companies in the industry.
The analysts pointed to the merger between BlueTriton and legacy Primo as a key factor in creating a diverse portfolio of brands, formats, and market routes. This merger is expected to provide a solid foundation for sustained top-line growth of 3-5% in the coming years. According to InvestingPro data, the company has already demonstrated strong growth with a 21% revenue increase in the last twelve months, while maintaining a GOOD financial health score.
Barclays analysts also emphasized the potential for a high single-digit adjusted EBITDA compound annual growth rate from 2025 to 2027. This growth is anticipated as Primo Brands continues to execute its synergy program, which is expected to enhance the company’s financial performance.
In addition to growth prospects, the analysts noted the company’s strong cash flow generation capabilities. They believe this financial strength positions Primo Brands to close the current valuation gap of approximately 2x compared to its domestic food and beverage peers.
In other recent news, Primo Brands Corp. has been the focus of several analyst reports and corporate developments. BofA Securities initiated coverage on the company with a Buy rating, setting a price target of $42.00. The firm highlighted Primo’s position as a leading bottled water producer and its potential to achieve significant cost synergies following its merger with Blue Triton. Mizuho (NYSE:MFG) also started coverage with an Outperform rating and a $43.00 price target, citing Primo’s ability to capitalize on the consumer shift toward healthier hydration options. Concurrently, RBC Capital maintained an Outperform rating with a $40.00 price target, emphasizing the company’s strong fundamentals and minimal exposure to tariffs. BMO Capital Markets reiterated its Outperform rating with a $45.00 price target, expressing confidence in Primo’s growth potential and strategic positioning.
Additionally, Primo Brands announced that two stockholders will offer 47.5 million shares of Class A common stock for sale. The proceeds from this secondary offering will go to the selling stockholders, with no new shares being issued by the company. Primo Brands has agreed to repurchase $100 million worth of its Class A common stock from these stockholders in a private transaction. This repurchase is contingent on the completion of the offering. These developments reflect ongoing investor interest and strategic financial maneuvers by Primo Brands as it navigates market dynamics.
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