Primo Banks Direct Delivery Business Faces Greater Difficulty in 2026 Due to Exit Rate, Revenue Mix

Primo Brands Corporation (NYSE:PRMB) is one of the best upside stocks to buy now. On November 26, Barclays analyst Lauren Lieberman lowered the firm’s price target on Primo Brands to $24 from $25 and maintained an Overweight rating on the shares. The company’s exit rate and revenue mix are expected to create a greater difficulty for its direct delivery business in 2026 than Barclays had previously anticipated.

Primo Brands reported its Q3 2025 earnings earlier in the same month, revealing a quarter characterized by strong margin expansion despite a decline in overall sales. Net sales were $1.766 billion, a 1.6% year-over-year decline. However, the company achieved $404.5 million in Comparable Adjusted EBITDA, representing a 6.8% year-over-year increase, resulting in a solid margin of 22.9%.

The decline in overall net sales was primarily driven by the Direct Delivery business, which saw a 6.5% comparable net sales decline, or ~$47 million. This underperformance was largely attributed to self-inflicted integration challenges that led to temporarily increased costs, including additional routes and customer service expenses. As a result, the company had to provide increased customer credits totaling $3.7 million year-over-year.

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.