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UPDATE: Northland Capital Markets Starts Primo Water Corporation (PRMW) at Outperform

September 22, 2014 7:51 AM EDT
Get Alerts PRMW Hot Sheet
Price: $17.76 +2.19%

Rating Summary:
    3 Buy, 8 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 20 | Down: 14 | New: 22
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(Updated - September 22, 2014 8:21 AM EDT)

Northland Capital Markets initiated coverage on Primo Water Corporation (NASDAQ: PRMW) with an Outperform rating and a price target of $6.50.

"Primo Water a only nationwide single source water solution for retailers in the U.S. and Canada. Primo generates a highly recurring revenue stream through its “razor-razorblade” business model with its dispensers being the razor and multi-gallon bottles of water and water refill as the razorblade. We estimate that PRMW can grow revenue 10% in FY14 and 12% in FY15, while growing Adjusted EBITDA just under 30%," said analyst Ryan MacDonald.

"We believe PRMW is currently undervalued given its solid near-term sales and adjusted EBITDA growth outlook and what we believe are very achievable long-term growth targets. Our $6.50 is based on an EV/EBITDA of about 12x and EV/Sales of 1.6x our FY15 estimates. The company currently operates at a net operating loss, which we expect to continue through FY15 before turning positive in FY16," he added.

For an analyst ratings summary and ratings history on Primo Water Corporation click here. For more ratings news on Primo Water Corporation click here.

Shares of Primo Water Corporation closed at $4.41 yesterday.



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