Sealed Air stock rating upgraded by RBC Capital on cost reductions

Investing.com - RBC Capital upgraded Sealed Air (NYSE:SEE) from Sector Perform to Outperform on Thursday, while raising its price target to $48.00 from $35.00. The stock, currently trading at $34.63, has shown strong momentum with a nearly 30% gain over the past six months, according to InvestingPro data.

The upgrade reflects RBC Capital’s positive outlook on three key factors: stabilization in Sealed Air’s Protective segment alongside continued strength in its Food business, potential cost reductions exceeding $100 million, and G&A optimization initiatives.

RBC Capital projects 30% upside potential for Sealed Air stock as the company executes these strategies and reduces its leverage ratio to 3x by fiscal year 2026.

The investment firm’s valuation is based on a blended 9x sum-of-the-parts analysis, which assigns a 10x multiple to the Food segment and a 7x multiple to the Protective segment, compared to Sealed Air’s current trading at approximately 8x FY26 EBITDA.

RBC Capital maintained its Q3 EBITDA estimate at $270 million while adjusting its FY25 and FY26 EBITDA forecasts to $1.125 billion and $1.175 billion, respectively.

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 projected $0.71, which represents a 25.35% surprise. Revenue for the quarter reached $1.34 billion, slightly above the anticipated $1.31 billion. In terms of analyst opinions, JPMorgan upgraded Sealed Air’s stock rating to Overweight, citing the company’s strong cash flow and potential positive developments in its Protective segment. JPMorgan also raised its price target to $36.00 from $33.00. Meanwhile, Jefferies lowered its price target for the company to $33.00 from $34.00, maintaining a Hold rating due to perceived weaknesses in Sealed Air’s Food segment. Despite this, Jefferies acknowledged stabilizing fundamentals in the Protective division. These developments highlight the varied perspectives on Sealed Air’s financial health and future prospects.

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