Goldman Sachs Reiterates Conviction Buy On MeadWestvaco Corp.

Goldman Sachs is reiterating its Conviction Buy rating and is raising its price target to $40 from $39 on MeadWestvaco Corp. (NYSE: MWV).

In a note to clients, Goldman writes, "We reiterate our CL-Buy on MWV given that the strong fundamentals (favorable boxboard pricing) and asset value (land) are not fully appreciated, in our view. MWV is trading at 4.5X our 2012 EBITDA (including our $1.6 bn estimate of MWV's land) relative to peers at 6.9X. We remain buyers of CCK and GPK given their strong EPS growth profiles and valuation. We see stronger rigid paper and metal cans (MWV, CCK, and GPK) fundamentals relative to flexible packaging (BMS, SEE) given greater industry consolidation and more favorable ROC trajectory."

Shares of MWV lost 74 cents on Friday to close at $31.97.