Primo Water Corporation (PRMW) PT Lowered to $21 at Jefferies After Conservative Outlook

March 1, 2021 8:33 AM EST
Get Alerts PRMW Hot Sheet
Price: $14.00 --0%

Rating Summary:
    4 Buy, 9 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 19 | Down: 18 | New: 47
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Jefferies analyst Kevin Grundy lowered the price target on Primo Water Corporation (NASDAQ: PRMW) to $21.00 (from $23.00) while maintaining a Buy rating. after the company delivered a strongquarter w/ 4Q revs of $505M coming in ~2% ahead of Street ests. and above the high-end of the co.'s guide of $470-500M. EBITDA of $98M beat guidance of $85-95M driven by better than expected performance in Europe, cost-cutting, synergy realization, and improved operating leverage in the Water Direct/Exchange residential business. The company's 1Q21 guide was mixed vs. Street w/revs of $455-485M (vs. Street $488M) and EBITDA of $70-75M (vs. Street $74M).

The analyst stated "PRMW's FY21 EBITDA guidance appears conservative as it implies modest LSD % underlying growth (ex-M&A/cost-syns/53rd wk in base) and does not include likely tuck-in M&A. We would also note that PRMW has now exceeded Street EBITDA ests. for seven consecutive qtrs, which should suggest improved visibility (and likely upside), despite the difficult macro backdrop." "PRMW has taken substantial steps tounlock latent value, incl. the divestiture of S&D Coffee/Tea and the acquisition of Primo.
We believe PRMW's transformation to a more stable and higher- growth/margin pureplay water biz remains under-appreciated."

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