Primo Brands (PRMB) is likely to deliver a solid Q2, with strength in its retail business expected to offset continued softness in direct delivery while setting the stage for improvement in the second half of 2026, RBC Capital Markets said in a Monday note.

The investment firm said it is modestly above consensus on both revenue and earnings for the quarter, with strong retail sales trends expected to offset continued weakness in the Direct Delivery business. RBC expects Direct Delivery sales to return to positive growth in Q3 despite ongoing customer churn and slower customer additions.

Management is likely to reiterate its full-year guidance, as the company chose not to update its outlook during intra-quarter commentary, with continued strength in the retail business expected to offset the slower recovery in the direct delivery segment, the report added.

The firm added that pricing initiatives across part of the retail portfolio and reduced promotional activity should support results, while continued execution in the retail business and a recovery in the direct delivery segment could drive upside to current market expectations later this year.

RBC has an outperform rating on the stock, with a $28 price target.

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