Is Bad Weather Drying Up Sales For Bottled Water Supplier Primo Brands?

BofA Securities analyst Peter T. Galbo reiterated the Buy rating on Primo Brands Corp PRMB, with a price forecast of $42.

Galbo noted that Primo Brands shares saw a brief rebound after weak performance in early June, supported by slightly improved one-week scanner data — but much of that gain was erased following another slowdown the next week.

The analyst reminded investors that the second and third quarters account for about 53% of the company’s annual sales, and that NielsenIQ scanner data is updated every two weeks.

Also Read: Primo Brands Under Pressure In Recent Weeks? Analyst Blames Cool, Wet Weather

According to Galbo, bottled water demand is closely tied to both temperature and rainfall patterns.

As part of his ongoing coverage, he plans to examine recent U.S. weather trends and share upcoming forecasts from the National Oceanic & Atmospheric Administration.

Galbo reviewed recent scanner data, noting that the 8% year-over-year sales decline for the week ending May 31 was mainly driven by poor weather, especially in the Northeast.

Sales trends improved slightly the following week, with a 1% decline as conditions improved, but fell again in the week ending June 14 with a 4.5% drop.

Looking ahead, Galbo expects next week's data for the week ending June 21 to show a modest rebound, thanks to hotter and drier weather across key regions served by Arrowhead and Ozarka.

While Deer Park and Poland Spring markets also experienced warmer-than-normal conditions, the impact on demand is less certain.

The analyst added that the Northwest heatwave could help sustain sequential gains, and data for the week ending June 28 may reflect a lift from the recent Northeast heatwave.

Galbo pointed to NOAA's six–10 day forecast, which continues to show elevated temperatures across much of the U.S.—particularly in the North and Southeast (covering Poland Spring and Deer Park), as well as the West Coast, Texas and Florida (key markets for Arrowhead, Ozarka and Zephyrhills).

Rainfall is expected to remain only slightly above average in most regions, with heavier precipitation limited to less densely populated states where Arrowhead is sold.

PRMB Price Action: Primo Brands shares are trading higher by 0.65% to $29.27 at publication on Friday.

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Photo: Courtesy Primo Brands