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Primo Brands Corporation (PRMB) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Primo Brands Corporation (PRMB)

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Intrinsic Value (DCF)

Current$18.55
→
Intrinsic$22.77
+23%
$8.84$22.77$49.22
Market implies 21% growth for 5 years
PRMB shows 23% potential upside using 23% growth — reasonable if fundamentals hold.
At $19, the market prices in continued strong cash flow growth (21%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $9 → Bull $49. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →19%21%23%25%
8%$33$37$42$47
10%$17$20$23$26
12%$8$10$12$15
14%$2$4$6$8

Bull Case

  • Bull case ($49) offers 165% upside at 28% growth, 9% discount
  • 19% margin of safety vs. base case estimate
  • Market-implied growth (21%) ≤ historical CAGR (23%)

Bear Case

  • Bear case ($9) implies 52% downside at 19% growth, 12% discount
  • Using 23% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$391.41M
Year 2$483.28M
Year 3$596.72M
Year 4$736.79M
Year 5$909.74M
Terminal$13.39B

📐 Model Inputs

Growth Rate23.5%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$317.00MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is PRMB stock undervalued or overvalued?
🟡 FAIRLY VALUED

PRMB trades at $18.55, within 10% of our $17.40 intrinsic value estimate. At 10.0% WACC and 23.5% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $4.22 (bear) to $36.80 (bull).

What is PRMB's intrinsic value?

Using a 5-year DCF model: Base FCF of $317M, projected at 23.5% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $5.06B net debt and dividing by 0.24B shares: Bear $4.22 | Base $17.40 | Bull $36.80. Current price $18.55 implies +8% to base case.

How is PRMB's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 23.5% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($9.28B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.