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Primo Water (PRMW) Shares Inch Up on Intact 2021 Revenue View
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Shares of Primo Water Corporation (PRMW - Free Report) gained 0.3% after the utility reaffirmed guidance for second-quarter 2021 as well as the full year. It expects annual adjusted EBITDA and the same for the June quarter in the range of $380-$390 million and $90-$95 million, respectively.
Also, the current-year revenue growth rate reiterates the previous estimate of 5%, indicating a rise from the 2020 reading while the metric for the second quarter is targeted between $490 million and $510 million.
Long-Term Expectation
For 2022 and beyond, the utility expects total organic revenues to grow 5% year over year. Revenues from water direct/exchange are expected to improve 4-5% year over year, the same water refill/filtration to increase 5-7% and that from water dispensers to go up 8% year over year. Additionally, adjusted EBITDA margins will likely expand 20-30 basis points on an annual basis.
The company expects to acquire assets worth $40-$60 million per year, which will further enhance its operations.
Investment in Infrastructure
Primo Water expects to spend $135 million in 2021. In the first quarter, the company invested $27 million. Aging of the water and wastewater infrastructure results in frequent water line breaks, which is a primary concern for the water utility operators. The pipeline cracks disrupt water services and adversely impact the service providers and customers.
The pipeline fissures not only increase the cost of water services but also expose it to possible contamination. Due to ruptures caused in aging pipelines, water utilities are doing their bit to renovate the old infrastructure. Primo Water’s efforts to upgrade infrastructure and make sufficient investments bode well.
Apart from Primo Water, water utility Essential Utilities (WTRG - Free Report) is making regular investments to overhaul the existing water and wastewater systems. Its long-term plan is to invest nearly $3 billion through 2023 to rehabilitate and strengthen water as well as natural gas pipeline systems. Water utility California Water Service (CWT - Free Report) plans to invest in the range of $270-$300 million for the ongoing year to strengthen its water and wastewater infrastructure. Another water utility Middlesex Water (MSEX - Free Report) — under the Water for Tomorrow program — is making regular capital investments to improve its system reliability, resiliency and overall service quality.
In the past year, shares of the company have gained 20.9% compared with the industry’s 14.6% growth.
One-Year Price Performance
Image Source: Zacks Investment Research
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Image: Bigstock
Primo Water (PRMW) Shares Inch Up on Intact 2021 Revenue View
Shares of Primo Water Corporation (PRMW - Free Report) gained 0.3% after the utility reaffirmed guidance for second-quarter 2021 as well as the full year. It expects annual adjusted EBITDA and the same for the June quarter in the range of $380-$390 million and $90-$95 million, respectively.
Also, the current-year revenue growth rate reiterates the previous estimate of 5%, indicating a rise from the 2020 reading while the metric for the second quarter is targeted between $490 million and $510 million.
Long-Term Expectation
For 2022 and beyond, the utility expects total organic revenues to grow 5% year over year. Revenues from water direct/exchange are expected to improve 4-5% year over year, the same water refill/filtration to increase 5-7% and that from water dispensers to go up 8% year over year. Additionally, adjusted EBITDA margins will likely expand 20-30 basis points on an annual basis.
The company expects to acquire assets worth $40-$60 million per year, which will further enhance its operations.
Investment in Infrastructure
Primo Water expects to spend $135 million in 2021. In the first quarter, the company invested $27 million. Aging of the water and wastewater infrastructure results in frequent water line breaks, which is a primary concern for the water utility operators. The pipeline cracks disrupt water services and adversely impact the service providers and customers.
The pipeline fissures not only increase the cost of water services but also expose it to possible contamination. Due to ruptures caused in aging pipelines, water utilities are doing their bit to renovate the old infrastructure. Primo Water’s efforts to upgrade infrastructure and make sufficient investments bode well.
Apart from Primo Water, water utility Essential Utilities (WTRG - Free Report) is making regular investments to overhaul the existing water and wastewater systems. Its long-term plan is to invest nearly $3 billion through 2023 to rehabilitate and strengthen water as well as natural gas pipeline systems. Water utility California Water Service (CWT - Free Report) plans to invest in the range of $270-$300 million for the ongoing year to strengthen its water and wastewater infrastructure. Another water utility Middlesex Water (MSEX - Free Report) — under the Water for Tomorrow program — is making regular capital investments to improve its system reliability, resiliency and overall service quality.
Zacks Rank & Price Performance
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past year, shares of the company have gained 20.9% compared with the industry’s 14.6% growth.
One-Year Price Performance
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How to Profit from Trillions on Spending for Infrastructure >>