Primo Water inventory downgraded by Raymond James amid sturdy year-to-date positive aspects By Investing.com

On Wednesday, Raymond James adjusted its stance on Primo Water Company (NYSE:) inventory, transferring its score from Sturdy Purchase to Outperform, with a value goal set at $21.00. The adjustment comes as the corporate’s shares have seen a major 19% improve because the starting of the yr, nearing a three-year peak.

The agency cited a number of constructive developments for Primo Water, together with the sale of its European operations to Culligan, which allowed for a discount in debt. Moreover, the corporate has expanded its share buyback program and introduced a 3rd consecutive annual dividend improve. Moreover, Primo Water is on monitor for its eighth straight yr of EBITDA progress.

Regardless of these constructive indicators, Raymond James believes that a lot of the “simple cash” has been made with Primo Water’s inventory. The agency identified that underneath the management of the brand new CEO, Robbert Rietbroek, who took the helm in January 2024, the corporate lacks operational catalysts as a result of nature of its enterprise.

The potential for mergers and acquisitions, notably with small native water distributors, is famous as the one important catalyst on the horizon. Nevertheless, the timing of such actions stays unsure, and Raymond James clarified that its estimates don’t account for potential future M&A actions.

The agency maintains that there’s nonetheless potential for the inventory to achieve its goal value, albeit with much less upside than previous to the inventory’s latest rally. Raymond James means that it might search for a rise in M&A actions earlier than contemplating a revision of its goal value for Primo Water.

InvestingPro Insights

As Primo Water Company (NYSE:PRMW) approaches its three-year peak, the newest information from InvestingPro underscores a number of key metrics that buyers might discover pertinent. With a market capitalization of $2.91 billion and a latest value near its 52-week excessive, the inventory shows a robust efficiency with a 1-month value whole return of 13.38% and an much more spectacular 3-month value whole return of twenty-two.4%. This aligns with Raymond James’ remark of the inventory’s important improve because the starting of the yr.

InvestingPro Suggestions spotlight Primo Water’s excessive shareholder yield and spectacular gross revenue margins, which stand at 64.17% for the final twelve months as of This autumn 2023. These figures are reflective of the corporate’s monetary well being and environment friendly administration, which could possibly be contributing components to the agency’s eight consecutive years of EBITDA progress. Furthermore, analysts have revised their earnings upwards for the upcoming interval, with the expectation that internet earnings will develop this yr.

For buyers trying to delve deeper into Primo Water’s potential and discover further InvestingPro Suggestions, there are extra insights out there on the platform. With an extra 10 suggestions listed, buyers can achieve a complete understanding of PRMW’s efficiency and future outlook. Make the most of coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Professional and Professional+ subscription at InvestingPro for an in depth funding evaluation.

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