Primo Brands Corporation (NYSE:PRMB) experienced a notable increase in its stock price, rising by 5.1% during trading on November 4, 2023. The shares reached a high of $16.47 before closing at $16.4950. Despite this uptick, trading volume saw a significant decline, with 2,223,316 shares changing hands—down 61% from the average volume of 5,652,356 shares.
Multiple analysts have recently assessed the stock, reflecting a mixed outlook. In a report released on November 4, Zacks Research downgraded Primo Brands from a “hold” to a “strong sell” rating. Conversely, Deutsche Bank Aktiengesellschaft maintained a “hold” rating but set a price target of $26.00 for the shares in a note dated August 8. TD Securities adjusted its price objective from $35.00 to $27.00, while Bank of America reduced its target from $32.00 to $26.00, both maintaining a “buy” rating.
According to MarketBeat.com, the overall sentiment among analysts is cautiously optimistic, with nine analysts rating the stock as a buy, three as hold, and two as sell. The average rating stands at “Moderate Buy,” with a price target of $29.50.
Financial Performance and Dividend Announcement
Primo Brands released its quarterly earnings on November 6, 2023, reporting earnings per share of $0.41, in line with analysts’ expectations. The company reported revenue of $1.77 billion, slightly below the forecast of $1.78 billion. Despite a 1.20% negative net margin, Primo Brands achieved a year-over-year revenue increase of 35.3%. Analysts predict the company will post earnings per share of $1.13 for the current fiscal year.
In addition to its earnings report, Primo Brands declared a quarterly dividend of $0.10, which will be distributed on December 5, 2023. Shareholders on record as of November 25 will be eligible for this dividend, representing an annualized yield of 2.4%. Notably, the company’s payout ratio is currently at -129.03%.
Share Buyback Program and Insider Transactions
On November 10, 2023, Primo Brands announced a new share buyback program allowing for the repurchase of up to $50 million in outstanding shares. This initiative suggests that the company’s board believes the stock is undervalued.
In insider trading news, Director Steven P. Stanbrook purchased 54,540 shares at an average price of $16.43 per share, totaling approximately $896,092.20. This acquisition increased his holdings to 181,601 shares, valued at nearly $2.98 million. Director Michael John Cramer also increased his position by acquiring 5,000 shares for a total of $78,650 on November 10.
In total, insiders have acquired 203,469 shares valued at approximately $3.21 million over the past quarter, indicating a strong confidence in the company’s future. Currently, insiders own 58.40% of the company’s stock.
Institutional Holdings and Market Outlook
Recent changes in institutional trading highlight growing interest in Primo Brands. JPMorgan Chase & Co. increased its holdings by 25.5% in the third quarter, now owning 3,698,550 shares valued at around $81.74 million. Other institutional investors, including Maven Securities LTD and Dark Forest Capital Management LP, have also expanded their positions.
Overall, 87.71% of the stock is currently held by hedge funds and institutional investors. As Primo Brands navigates its financial landscape, analysts and investors will be watching closely to determine if recent stock movements signal a sustainable trend or if caution is warranted in light of shifting analyst ratings.
