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RBC Capital Stays Cautious on Primo Brands (PRMB) Due to Slow Volume Recovery Concerns Post-Q3 Earnings.
Yahoo Finance· 2025-11-25 13:07
Group 1 - Primo Brands Corporation (NYSE:PRMB) is currently considered one of the most undervalued stocks on the NYSE, with RBC Capital lowering its price target from $37 to $30 while maintaining an Outperform rating [1][3] - The company's Q3 2025 earnings report revealed net sales of $1.766 billion, reflecting a modest year-over-year decline of 1.6%, but a 6.8% increase in Comparable Adjusted EBITDA to $404.5 million, resulting in a margin expansion to 22.9% [2] - Unit Case Volume Growth for the company increased by 0.7% despite the overall drop in sales [2] Group 2 - The direct delivery segment was the primary drag on performance, experiencing a 6.5% decline in comparable net sales, which equated to a loss of $47 million, attributed to integration challenges post-merger [4] - Increased costs from the direct delivery business included additional routes and customer service expenses, along with $3.7 million in increased credits to customers year-over-year [4] - The company has stabilized its operations, successfully improving its delivery service rate back to approximately 95%, consistent with historical levels [4] Group 3 - Primo Brands operates as a branded beverage company in North America, providing solutions through various water-related services and products, including water dispensers and self-service refill stations [5]