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Investing.com - Truist Securities reiterated its Buy rating and $33.00 price target on Sealed Air (NYSE:SEE) on Thursday. Currently trading at $30.94, InvestingPro analysis suggests the stock is undervalued, with analyst targets ranging from $31 to $50.
The firm believes Sealed Air is on track to meet its second-quarter guidance, despite noting that the market appears to be ascribing negative value to the company’s Protective business segment based on sum-of-the-parts valuation. The company maintains strong fundamentals, with InvestingPro data showing a healthy 9% free cash flow yield and a robust financial health score.
Truist Securities calculates a $47 sum-of-the-parts value for Sealed Air based on an 11x EBITDA multiple for the Food business and a 7x multiple for Protective. The firm notes that assuming a 0x multiple for Protective would result in a $33 valuation, while a -1x multiple yields approximately $31, close to the stock’s current trading price.
The research firm expressed surprise at this valuation, stating it believes the Protective segment has likely bottomed with volumes expected to improve throughout this year and into next year, leading to margin improvement. Despite facing headwinds, the segment still generates over 17% EBITDA margins with a return on assets of approximately 12%. The company’s overall gross profit margin stands at 30.3%, and it has maintained dividend payments for 20 consecutive years, according to InvestingPro’s comprehensive analysis. Discover more insights and 6 additional ProTips in the detailed Pro Research Report.
Truist Securities indicates that Sealed Air management remains focused on improving Protective operations in the near term, which could potentially position the business for a sale "at some future point should the current turnaround efforts fail to deliver the proper results."
In other recent news, Sealed Air Corporation reported its first-quarter 2025 earnings, exceeding expectations with an adjusted EPS of $0.81, surpassing the forecast of $0.67. The company’s revenue met expectations at $1.27 billion, despite a slight decline from the previous year. UBS reiterated its buy rating on Sealed Air, highlighting the company’s focus on cost reduction and improved customer retention, despite challenges in the Protective segment. Jefferies raised its price target for Sealed Air to $34.00, noting the company’s undervalued stock and improved operations within its Protective division. The firm maintained a Hold rating, reflecting a cautious yet optimistic outlook. During its annual stockholder meeting, Sealed Air’s director nominees were elected, and PricewaterhouseCoopers LLP was ratified as the independent auditor. The company’s executive compensation was also approved in an advisory vote. These developments underscore Sealed Air’s strategic initiatives and governance, aiming to enhance its financial performance and market position.
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