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Investing.com - TD Cowen has maintained its Buy rating and $35.00 price target on Primo Brands Corp. (NYSE:PRMB), highlighting the company’s underappreciated free cash flow generation potential. According to InvestingPro data, the company’s current valuation appears attractive, with analysts setting price targets ranging from $26 to $43.
The beverage company’s stock has declined 19.7% year-to-date and is trading 32% below its 52-week high of $35.84, despite posting a strong 9.7% gain over the past year. TD Cowen attributes the recent pullback to integration-related service disruptions.
The research firm notes that service levels have now rebounded, with demand remaining healthy and Primo Brands successfully gaining market share against competitors. InvestingPro analysis shows the company maintains a "GOOD" overall financial health score, with revenue growing 26.3% in the last twelve months.
TD Cowen points out that Primo Brands currently trades at 8.8x EBITDA, down from approximately 12.5x previously, compared to roughly 18x for its beverage industry peers, creating what the firm describes as a "compelling risk-reward opportunity."
The $35 price target is based on a 9.9x multiple applied to TD Cowen’s EBITDA estimate for the 12 months ending June 2027, representing a premium to current trading levels to reflect increasing market share, unique distribution strengths, and projected EBITDA/FCF growth.
In other recent news, Primo Water Corporation announced its second-quarter 2025 earnings, which exceeded analysts’ expectations. The company reported an earnings per share (EPS) of $0.36, surpassing the forecasted $0.26 by 38.46%. Revenue also outperformed projections, reaching $1.73 billion compared to the anticipated $502.1 million, a significant surprise of 244.55%. Despite these positive earnings results, BMO Capital has lowered its price target for Primo Brands Corp. from $45.00 to $42.00. The decision comes in light of the company’s challenges, including integration issues, weather disruptions, and problems related to its coffee business exit. BMO Capital, however, maintains an Outperform rating for the company. These developments highlight the mixed sentiments surrounding Primo Water’s recent performance.
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