Sealed Air's Recent Stock Sell-Off Was Overdone, Says Bullish Analyst

Sealed Air Corp (NYSE: SEE) shares were climbing in early trading on Monday.

The stock lost around 12% since March 28, versus a decline of about 1% in S&P 500, due to investor concerns around volume headwinds and competitive pressures, according to Truist Securities.

The Sealed Air Analyst: Michael Roxland upgraded the rating for Sealed Air from Hold to Buy, while raising the price target from $39 to $44.

The Sealed Air Thesis: The market seemed to have “overreacted” to some of the company’s “transitory headwinds,” Roxland said in the upgrade note.

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“From our vantage point, nothing has changed post 4Q earnings in late February that would warrant such a sell-off,” the analyst wrote. He added, however, that the resolution of the co-CEO structure could become a tailwind in the near term.

While Food volumes have weakened due to “a softer U.S. cattle cycle,” the segment still managed to generate an EBITDA margin of about 22.0% in 2023, Roxland stated. “Meanwhile, volumes should begin to improve in 2024,” driven by “share gains in retail markets and continued growth in Liquibox (fluids & liquids), which comprises ~8% of Food sales and ~5% of total company sales,” he added.

SEE Price Action: Shares of Sealed Air had risen by 2.16% to $33.35 at the time of publication on Monday.

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