Investing.com– BMO initiated coverage on Primo Brands (NYSE: ) with an Outperform rating and a high price target, calling the stock an attractive pick on its large U.S. water brand market share
BMO rated the stock as Outperform with a $40 price target, representing a nearly 30% upside from Primo’s Friday close of $31.07.
The brokerage said Prima’s current price represents an “attractive opportunity at a compelling entry point,” and expects the company to deliver strong adjusted EBITDA growth on robust sales and healthy margins.
BMO expects the company to achieve at least mid-single-digit revenue growth thanks to the support of its brands. This paves the way for adjusted EBITDA margins to reach the mid-20% range in the coming years, the brokerage said.
Primo was founded last year through the merger of Primo Water and BlueTriton Brands, and owns several major packaged drinking water brands, including Poland Spring, Pure Life, Mountain Valley and Saratoga.
BlueTriton was the North American subsidiary of European consumer giant Nestle SA (SIX: ), and sold its bottling facilities to private equity in 2021.
