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Sealed Air Upgraded to Strong Buy - Analyst Blog

By: Zacks.com
Posted: 9/11/2013 3:57:00 PM
Referenced Stocks: AMAT;GLT;KS;RKT;SEE

On Sep 10, Zacks Investment Research upgraded Sealed Air Corporation ( SEE ) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Share price and earnings estimates for Sealed Air have been trending upward on the back of strong second-quarter 2013 results reported on Aug 2. Moreover, shares of this specialty packaging service provider to a diverse set of end markets attained its 52-week high of $31.20 on Aug 5. The long-term expected earnings growth rate for this stock is 13.2%.

Sealed Air reported strong second-quarter 2013 results. Earnings of 35 cents per share more than doubled from the year-ago earnings of 16 cents per share and beat the Zacks Consensus Estimate by 40%. The upbeat results were driven by strong growth in Asia, Middle East, Africa and Turkey (AMAT) and Latin America and modest growth in North America. Furthermore, margin expansion in the Food & Beverage and Institutional & Laundry divisions, benefits from pricing initiatives, and focus on manufacturing and operational improvements added to the performance.

Sealed Air maintained its guidance for fiscal 2013 adjusted earnings in the range of $1.10 to $1.20 per share. Net sales are expected to be within $7.7 to $7.9 billion. Adjusted EBITDA is expected in the range of $1.01 to $1.03 billion.

Sealed Air's Integration & Optimization Program will generate cost savings and benefits of approximately $195 million to $200 million by the end of 2014. The company announced an additional restructuring plan with projected annualized savings of $80 million by 2015. Sealed Air's acquisition of Diversey in 2011 has expanded its presence beyond specialty packaging solutions. This combination is expected to further enhance Sealed Air's earnings per share and free cash flow generation.

The Zacks Consensus Estimate for 2013 increased 4.3% to $1.21 per share over the last 60 days. For 2014, the Zacks Consensus Estimate moved north by 4.1% to $1.51 per share.

Other Stocks to Consider

KapStone Paper and Packaging Corporation ( KS ) and PH Glatfelter Co. ( GLT ), both carrying a Zacks Rank #1, and Rock-Tenn Company  ( RKT ), with a  Zacks Rank #2(Buy), are performing well and are also worth considering.



GLATFELTER (GLT): Free Stock Analysis Report

KAPSTONE PAPER (KS): Free Stock Analysis Report

ROCK-TENN CO (RKT): Free Stock Analysis Report

SEALED AIR CORP (SEE): Free Stock Analysis Report

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Zacks Investment Research