Primo Brands Plummets 9% on Earnings Miss and Buyback Skepticism: Is the Downtrend Reversible?

Summary
• Primo Brands (PRMB) slumps 9.07% intraday to $24.015, hitting a 52-week low of $22.635
• Q2 earnings miss revenue and EPS estimates, sparking bearish momentum
• $250M share buyback program announced but fails to arrest selloff
• Technicals show oversold RSI (19.84) and bearish MACD divergence
Primo Brands faces a perfect storm of earnings disappointment and technical exhaustion. With revenue and EPS both undershooting estimates, the stock has plunged to its lowest level since early 2025. The $250M buyback program, while well-intentioned, appears insufficient to counter investor skepticism. Traders are now scrutinizing whether the 52-week low at $22.635 will hold or trigger a short-term rebound.

Earnings Disappointment and Buyback Doubts Fuel Sharp Selloff
Primo Brands' 9.07% intraday decline stems from a Q2 earnings report that missed both revenue ($1.73B vs. $1.85B) and EPS ($0.36 vs. $0.43) estimates. The bearish reaction intensified after the company announced a $250M share repurchase program, which investors interpreted as a defensive move rather than a confidence-building gesture. Analysts now project Q3 revenue at $1.91B and full-year 2025 revenue at $7.10B, but the market remains unconvinced about Primo's ability to meet these targets. The stock's 12.1% monthly decline and 7.7% two-week drop have created a self-fulfilling prophecy of selling pressure.

Non-Alcoholic Beverage Sector Gains Modestly as Coca-Cola Rises 1.4%
While Primo Brands tumbles, the broader non-alcoholic beverage sector shows resilience. Coca-Cola (KO), the sector's bellwether, rose 1.4% intraday, reflecting divergent investor sentiment. Primo's struggles with pricing and volume contrast with KO's stable demand dynamics. However, the sector's recent focus on nostalgic snack trends and functional beverages may not directly benefit Primo, which remains anchored to its core hydration brands.

Bearish Technicals and Volatile Options: Key Plays for Short-Term Traders
• RSI: 19.84 (oversold)
• MACD: -0.815 (bearish divergence)
• Bollinger Bands: Price at 26.35 (lower band)
• 30D MA: 28.81 (price below)
• Turnover Rate: 5.38% (high liquidity)
Primo Brands is trapped in a bearish technical trap. The RSI at 19.84 suggests extreme overselling, while the MACD histogram (-0.181) confirms weakening momentum. Traders should monitor the 22.635 support level and 24.55 intraday high for potential reversal cues. The 5.38% turnover rate indicates sufficient liquidity for position sizing.

Top Options Plays
1. PRMB20250815P25 (Put Option)
• Code: PRMB20250815P25
• Strike: $25
• Expiry: 2025-08-15
• IV: 50.24% (moderate)
• LVR: 17.79% (high leverage)
• Delta: -0.678 (deep in-the-money)
• Theta: -0.001 (low time decay)
• Gamma: 0.189 (high sensitivity)
• Turnover: $445,315 (liquid)
This put option offers 17.79% leverage with 50.24% implied volatility, ideal for capitalizing on a potential breakdown below $25. The high gamma ensures responsiveness to price swings, while the low theta minimizes decay risk before expiration.

2. PRMB20250815C25 (Call Option)
• Code: PRMB20250815C25
• Strike: $25
• Expiry: 2025-08-15
• IV: 36.19% (moderate)
• LVR: 120.10% (extreme leverage)
• Delta: 0.252 (at-the-money)
• Theta: -0.035 (high decay)
• Gamma: 0.234 (high sensitivity)
• Turnover: $54,421 (liquid)
This call option provides 120.10% leverage but carries high theta decay (-0.035). It's best suited for aggressive bulls expecting a sharp rebound above $25. The 36.19% IV reflects market uncertainty.

Payoff Analysis
Assuming a 5% downside to $22.815: PRMB20250815P25 payoff = $2.185 (K - ST), PRMB20250815C25 payoff = $0. Traders should prioritize the put option for bearish exposure. If $22.635 breaks, the PRMB20250815P25 offers short-side potential.

Backtest Primo Brands Stock Performance
The backtest of PRMB's performance after a -9% intraday plunge shows mixed results. While the 3-day win rate is high at 61.97%, the 10-day win rate drops to 56.34% and the 30-day win rate further decreases to 47.89%. This suggests that although PRMB has a strong short-term rebound potential, its long-term performance is more volatile.

Critical Support Test Looms: Act Before the 52-Week Low Breakdown
Primo Brands faces a pivotal test at its 52-week low of $22.635. The oversold RSI and bearish MACD suggest a potential rebound, but the Q2 earnings miss and weak guidance cast doubt on sustainability. Traders should prioritize the PRMB20250815P25 put for bearish exposure while monitoring Coca-Cola's 1.4% rise as a sector benchmark. A breakdown below $22.635 would validate the bear case, while a rebound above $24.55 could trigger a short-term bounce. Watch for $22.635 breakdown or regulatory reaction.