By Sam Boughedda
CubeSmart (NYSE:CUBE) and Primo Water (NYSE:PRMW) were added to Raymond James Analyst Current Favorites list on Tuesday, with Strong Buy ratings maintained on both.
The firm told investors in a research note that CubeSmart has near-term upside potential.
That potential is driven by "1) easier comps in 2023 driving the potential for better relative performance vs. peers; 2) its attractive valuation (absolute and relative); and 3) smaller size that makes any external growth more impactful," the analysts stated. Raymond James currently has a $48 price target on the stock.
For Primo Water, Raymond James added the stock to its list after its stock decline so far this year.
"The recently previewed 2023 guidance is slightly ahead of our estimates, and as always, there is no credit ascribed for prospective M&A. The big picture is that water quality in both North America and Europe leaves much to be desired," the analysts wrote.
"Primo's multi-pronged sales strategy enables consumers and businesses to get high-quality drinking water at a lower price point than single-use plastic bottles, as well as avoiding the associated waste — hence the sustainability aspect of the story," they add.
"The recurring revenue model is bolstered by tuck-in M&A that provides incremental uplift to estimates. From an ESG perspective, we note that Primo stands out for having already achieved carbon-neutral status."