RBC Capital Stays Cautious on Primo Brands (PRMB) Due to Slow Volume Recovery Concerns Post-Q3 Earnings.

Primo Brands Corporation (NYSE:PRMB) is one of the most undervalued NYSE stocks to buy right now. On November 7, RBC Capital analyst Nik Modi lowered the firm’s price target on Primo Brands to $30 from $37, while maintaining an Outperform rating on the shares. This sentiment was posted after the company released its Q3 2025 earnings results. RBC Capital acknowledged that the company overcame its delivery issues but also warned investors that a slow pace of volume recovery will hurt near-term figures and valuation.

In its earnings report for Q3 released on the same day, Primo Brands disclosed delivering mixed results marked by strong profitability and continued challenges in its direct delivery segment. Net sales for the quarter reached $1.766 billion, which was a modest 1.6% year-over-year decline. In contrast, the company’s focus on efficiency drove a 6.8% year-over-year increase in Comparable Adjusted EBITDA to $404.5 million, expanding the margin to 22.9%. Despite the drop in sales, the company’s Unit Case Volume Growth increased by 0.7%.

The primary drag on performance was the direct delivery business, which saw a 6.5% decline in comparable net sales, equating to $47 million. This decline was attributed to self-inflicted integration challenges following the merger, which led to temporary increased costs, including additional routes and customer service expenses, and required providing $3.7 million year-over-year in increased credits to customers. However, the company has stabilized its operations, successfully improving its delivery service rate back to ~95%, which is consistent with historical levels.

Primo Brands Corporation (NYSE:PRMB) operates as a branded beverage company in North America. It offers solutions through water dispensers, direct delivery of refillable/reusable bottles, a pre-filled Water exchange program, and water filtration appliances, as well as operates self-service water refill stations.

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Disclosure: None. This article is originally published at Insider Monkey.