Shareholders of Primo Water (NYSE:PRMW) Corporation are growing concerned as the company faces a substantial downgrade in next year's revenue forecasts due to mounting negative analyst sentiment. The eight analysts covering Primo Water predict an 8% decline to $2.1 billion in 2024 revenues and a 13% drop in earnings per share to $0.64.
This grim forecast marks a stark reversal from the company's historical growth rate of 2.5% over the past five years and falls substantially short of the wider industry's anticipated annual growth of 2.6%. The downgrade contrasts sharply with the stock's recent 12% rise to CA$20.20.
Individual analyst valuations for Primo Water's share price vary significantly, ranging from a bullish $21.00 to a bearish $15.15 per share. Despite these downward revisions, the consensus price target remains fixed at $18.08 per share, indicating that analysts do not foresee these changes affecting Primo Water's intrinsic value significantly.
InvestingPro Insights
In light of the challenging outlook for Primo Water Corporation, it's helpful to consider key data points and insights from InvestingPro. The company has a perfect Piotroski Score of 9, indicating strong financial health. Additionally, Primo Water's consistently increasing earnings per share and impressive gross profit margins, at 60.85% in the last twelve months as of Q3 2023, may provide some reassurance to investors.
InvestingPro data also shows a market capitalization of $2360M and a P/E ratio of 20.29, suggesting the company still holds value. In the last twelve months as of Q3 2023, the company saw a revenue growth of 4.3% and EBITDA growth of 13.16%. Despite the recent downgrade, the company has also seen a significant return over the past week.
InvestingPro Tips also indicate that Primo Water's strong earnings should allow management to continue dividend payments, which is reflected in the company's dividend yield of 2.17% as of August 2023. This, along with the prediction that the company will be profitable this year, could be a silver lining for investors.
For more in-depth analysis and additional tips, consider exploring the InvestingPro platform, which features a wealth of information for informed investment decisions.
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