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Investing.com - JPMorgan upgraded Sealed Air (NYSE:SEE) from Neutral to Overweight on Tuesday, raising its price target to $36.00 from $33.00. The company, currently valued at $4.86 billion, has demonstrated strong financial health with an overall score of "GOOD" according to InvestingPro analysis.
The upgrade comes as JPMorgan views Sealed Air as "a good free cash flow generator selling at a reasonable trading multiple" with its Protective segment approaching a positive turn in business fundamentals after experiencing prolonged negative volume and price growth. This assessment aligns with the company’s impressive 8% free cash flow yield and its 20-year track record of consistent dividend payments.
JPMorgan expects improved volumes and profitability in the Protective segment for 2026, coupled with strong free cash generation, could drive share price growth. The firm believes Sealed Air currently trades at a discount to its private market value, noting that competitor Berry was purchased by Amcor at 8.7x EBITDA, while Sealed Air offers higher gross margin and business quality. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report covering over 1,400 US stocks.
The new $36 price target for December 2026 reflects a 7.8x multiple of EBITDA based on JPMorgan’s 2026 estimates and an 8.0-8.5% free cash flow yield. The target increase from $33 acknowledges the strength of Sealed Air’s free cash flow generation.
According to JPMorgan’s analysis, Sealed Air is likely to generate approximately 8% free cash flow yield for both 2025 and 2026 with reduced working capital pressure, while its EBITDA multiple sits just under 8x for 2025 and about 7.4x for 2026 based on the firm’s estimates.
In other recent news, Sealed Air Corporation reported its second-quarter earnings for 2025, exceeding analyst expectations. The company achieved an adjusted earnings per share (EPS) of $0.89, surpassing the forecasted $0.71, representing a 25.35% surprise. Additionally, revenue reached $1.34 billion, slightly above the anticipated $1.31 billion. In a separate development, Jefferies adjusted its price target for Sealed Air to $33.00 from $34.00, while maintaining a Hold rating on the stock. This adjustment was attributed to observed weaknesses in Sealed Air’s Food business segment, despite the stabilization of its Protective division fundamentals. These developments reflect recent shifts in Sealed Air’s business performance and market assessments.
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