Morgan Stanley’s new Overweight on Primo Brands (NYSE: PRMB) highlights a nearly 20% pullback—driven by wet-spring scanner data and direct-delivery teething pains—as a rare buying opportunity. Here’s what matters, and exactly how to pull the numbers yourself.
1. EV/EBITDA Valuation: Discount to Peers
-
Current multiple: 16× 2026 EV/EBITDA
-
Peer average: ~18× for U.S. beverage names
-
Morgan Stanley target: 11× 2026 EV/EBITDA → $38 price target
Action: Fetch Primo’s latest EV and EBITDA estimates via the Ratios TTM API to confirm the 9× entry multiple yourself.
2. Integration & Weather Headwinds Are Peaking
-
Scanner data dip: Attributed to unusually wet spring slowing retail restocks
-
Direct-delivery hiccups: Early integration of BlueTriton channels drove short-term inefficiencies
-
Outlook: Normalizing summer weather + full operations at the Texas plant should restore volume growth
3. Merger Synergies Fuel Profit Growth
-
Synergy target: $300 million by year-end 2026 (~23% of 2024 pro forma EBITDA)
-
Revenue growth: 21% in last twelve months
-
Profit visibility: Synergies cushion against sales or cost surprises
Tip: Pull Primo’s top-line and margin history with the Full Financials API to model synergy impacts on EBITDA.
4. Analyst Consensus & Share Moves
-
Barclays, BofA, Mizuho & RBC: All with Buy/Outperform ratings and $40–$43 targets
-
Secondary offering: 47.5 million shares sold by insiders; $100 million buyback announced
-
Implication: Sponsor exits partially offset by management’s commitment to value support
Conclusion
Primo Brands trades at a 20% EV/EBITDA discount to peers amid fading headwinds and robust synergy visibility—setting up an attractive risk-reward. Use Financial Modeling Prep’s Ratios TTM API and Full Financials API to build your own Primo Brands valuation dashboard today.
