Sealed Air: Outlook for 2024

Sealed Air, the renowned manufacturer of Bubble Wrap, is expected to rebound next year following a challenging period in 2023, according to analysts at Citi.

Improved Rating

In their latest report on Monday, Citi raised their rating on Sealed Air's stock (ticker: SEE) from Neutral to Buy. They maintained a target price of $41. As a result, the stock experienced a 3.2% increase, reaching $32.41 in afternoon trading.

Positive Growth Forecast

Sealed Air, known for its production of Cryovac, Liquibox, and Bubble Wrap, is projected to achieve mid-single-digit growth in earnings before interest, tax, depreciation, and amortization (EBITDA) in 2024. The report from Citi attributed this positive outlook to cost-saving measures implemented by the company and a revival in sales volume.

Other Factors Boosting the Stock

In addition to the growth forecast, several other factors contribute to the positive sentiment surrounding Sealed Air's stock. The company's valuation is deemed supportive, and there is speculation that it may consider selling off certain business divisions or exploring potential partnerships. These possibilities present opportunities for further financial gains.

Despite a challenging year, with a 35% decline in stock value so far in 2023, this decrease is attributed to lower sales volumes and downward revisions in earnings.

Potential for Positive Surprise

Following the company's announcement in August that weak demand is expected to persist throughout the year, Sealed Air has positioned itself for a potential positive surprise. By lowering its net sales and adjusted earnings forecasts for the fiscal year, the company has set achievable targets.

By carefully managing its operations and exploring new avenues for growth, Sealed Air aims to overcome the challenges it faced in 2023 and emerge stronger in the coming years.

(Original report by Emily Dattilo at Dow Jones)