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Here's Why You Should Retain Sealed Air (SEE) Stock for Now
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Sealed Air Corporation (SEE - Free Report) is well-poised for growth, backed by its focus on automation, digital and sustainability that is expected to drive above-market growth in its core business. Solid demand in end-markets, acquisitions, expected gains from its ongoing productivity improvement system — SEE Operating Engine, and favorable growth estimates are other factors that make it worth retaining in one’s portfolio.
Zacks Rank & Impressive Price Performance
Image Source: Zacks Investment Research
Sealed Air currently carries a Zacks Rank #3 (Hold). Over the past year, the stock has surged 46.2% compared with the industry’s and the Zacks S&P 500 composite’s increase of 4.4% and 14.8%, respectively. Meanwhile, the Industrial Products sector declined 4.4%
Upbeat Growth Projections
The Zacks Consensus Estimate for earnings for 2022 is currently pegged at $4.12, which suggests year-over-year growth of 16%. The same for 2023 projects year-over-year improvement of 12%.
The company has an estimated long-term earnings growth rate of 10.6%.
Cheap Valuation
Sealed Air’s trailing 12-month EV/EBITDA ratio is 11.79, while the industry's average trailing 12-month EV/EBITDA is 19.98. The stock is cheaper at this point based on the ratio.
Return on Assets (ROA)
Sealed Air currently has a ROA of 8.9%, while the industry recorded a ROA of 6.7%. An above-average ROA denotes that the company is generating earnings by effectively managing assets.
Business Tailwinds
Strong demand for automated equipment and sustainable packaging solutions continues to drive Sealed Air’s food and protected packaging segments’ growth. In food, the retail channel and protein exports are anticipated to be solid. Its protein automation pipeline continues to grow across all regions, with major food producers committing to its SEE Touchless Automation future. The company has been witnessing year-over-year higher foodservice demand owing to the reopening of restaurants and other public venues. Backed by this, its fluid solutions portfolio, comprising Cryovac Barrier Bags and pouches for condiments, soups and sauces, has been seeing growth. In the protective segment, continued growth in e-commerce and fulfillment and higher demand in the industrial end markets are likely to drive performance.
Meanwhile, e-commerce sales, which contribute around 12% to the company’s sales, have been on the rise amid the stay-at-home scenario. Sealed Air continues to capitalize on global e-commerce growth and increased demand for recyclable materials, fiber-based solutions and automated packaging.
The company’s SEE automated solutions strategy is driving growth for the next phase of its Reinvent SEE business transformation. Sealed Air is meeting customers' most critical needs for safety, productivity and reducing labor dependency with its touchless automated solutions. The company’s pipeline for automated equipment continues to improve, and it intends to more than double its automation business to over $1 billion by 2025. It is investing to double its equipment production and service capacity over the next few years. These investments, along with the company’s acquisitions of Automated Packaging Systems, AFP, Inc and Fagerdala, will drive growth.
In December 2018, Sealed Air commenced work on its reformation plan — Reinvent SEE Strategy — to drive its growth. Over the 2018-2021 time frame, the company realized approximately $354 million of Reinvent SEE benefits — higher than originally expected. This year, it expects around $20 million of benefits from Reinvent SEE program and around $40 million in benefits from SEE Operating Engine (its ongoing productivity improvement system). This will continue to boost the bottom-line performance.
Stocks to Consider
Some better-ranked stocks in the Industrial Products sector are AGCO Corporation (AGCO - Free Report) , Applied Industrial Technologies, Inc. (AIT - Free Report) and Packaging Corporation of America (PKG - Free Report) . While AGCO sports a Zacks Rank #1 (Strong Buy), Applied Industrial and Packaging Corp carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
AGCO Corp has an estimated earnings growth rate of 12.1% for 2022. In the past 60 days, the Zacks Consensus Estimate for the year’s earnings has been revised upward by 11%.
AGCO has a trailing four-quarter earnings surprise of 56.6%, on average. In the past year, the company’s shares have increased 5%.
Applied Industrial Technologies has an expected earnings growth rate of 24.3% for fiscal 2022. The Zacks Consensus Estimate for fiscal-year earnings has moved up 9% in the past 60 days.
Applied Industrial has a trailing four-quarter earnings surprise of 28%, on average. AIT’s shares have gained 13% in the past year.
Packaging Corp has an estimated earnings growth rate of 12.6% for 2022. In the past 60 days, the Zacks Consensus Estimate for the year’s earnings has been revised upward by 12%.
Packaging Corp has a trailing four-quarter earnings surprise of 22.8%, on average. In the past year, the company’s shares have appreciated 15%.
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Here's Why You Should Retain Sealed Air (SEE) Stock for Now
Sealed Air Corporation (SEE - Free Report) is well-poised for growth, backed by its focus on automation, digital and sustainability that is expected to drive above-market growth in its core business. Solid demand in end-markets, acquisitions, expected gains from its ongoing productivity improvement system — SEE Operating Engine, and favorable growth estimates are other factors that make it worth retaining in one’s portfolio.
Zacks Rank & Impressive Price Performance
Image Source: Zacks Investment Research
Sealed Air currently carries a Zacks Rank #3 (Hold). Over the past year, the stock has surged 46.2% compared with the industry’s and the Zacks S&P 500 composite’s increase of 4.4% and 14.8%, respectively. Meanwhile, the Industrial Products sector declined 4.4%
Upbeat Growth Projections
The Zacks Consensus Estimate for earnings for 2022 is currently pegged at $4.12, which suggests year-over-year growth of 16%. The same for 2023 projects year-over-year improvement of 12%.
The company has an estimated long-term earnings growth rate of 10.6%.
Cheap Valuation
Sealed Air’s trailing 12-month EV/EBITDA ratio is 11.79, while the industry's average trailing 12-month EV/EBITDA is 19.98. The stock is cheaper at this point based on the ratio.
Return on Assets (ROA)
Sealed Air currently has a ROA of 8.9%, while the industry recorded a ROA of 6.7%. An above-average ROA denotes that the company is generating earnings by effectively managing assets.
Business Tailwinds
Strong demand for automated equipment and sustainable packaging solutions continues to drive Sealed Air’s food and protected packaging segments’ growth. In food, the retail channel and protein exports are anticipated to be solid. Its protein automation pipeline continues to grow across all regions, with major food producers committing to its SEE Touchless Automation future. The company has been witnessing year-over-year higher foodservice demand owing to the reopening of restaurants and other public venues. Backed by this, its fluid solutions portfolio, comprising Cryovac Barrier Bags and pouches for condiments, soups and sauces, has been seeing growth. In the protective segment, continued growth in e-commerce and fulfillment and higher demand in the industrial end markets are likely to drive performance.
Meanwhile, e-commerce sales, which contribute around 12% to the company’s sales, have been on the rise amid the stay-at-home scenario. Sealed Air continues to capitalize on global e-commerce growth and increased demand for recyclable materials, fiber-based solutions and automated packaging.
The company’s SEE automated solutions strategy is driving growth for the next phase of its Reinvent SEE business transformation. Sealed Air is meeting customers' most critical needs for safety, productivity and reducing labor dependency with its touchless automated solutions. The company’s pipeline for automated equipment continues to improve, and it intends to more than double its automation business to over $1 billion by 2025. It is investing to double its equipment production and service capacity over the next few years. These investments, along with the company’s acquisitions of Automated Packaging Systems, AFP, Inc and Fagerdala, will drive growth.
In December 2018, Sealed Air commenced work on its reformation plan — Reinvent SEE Strategy — to drive its growth. Over the 2018-2021 time frame, the company realized approximately $354 million of Reinvent SEE benefits — higher than originally expected. This year, it expects around $20 million of benefits from Reinvent SEE program and around $40 million in benefits from SEE Operating Engine (its ongoing productivity improvement system). This will continue to boost the bottom-line performance.
Stocks to Consider
Some better-ranked stocks in the Industrial Products sector are AGCO Corporation (AGCO - Free Report) , Applied Industrial Technologies, Inc. (AIT - Free Report) and Packaging Corporation of America (PKG - Free Report) . While AGCO sports a Zacks Rank #1 (Strong Buy), Applied Industrial and Packaging Corp carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
AGCO Corp has an estimated earnings growth rate of 12.1% for 2022. In the past 60 days, the Zacks Consensus Estimate for the year’s earnings has been revised upward by 11%.
AGCO has a trailing four-quarter earnings surprise of 56.6%, on average. In the past year, the company’s shares have increased 5%.
Applied Industrial Technologies has an expected earnings growth rate of 24.3% for fiscal 2022. The Zacks Consensus Estimate for fiscal-year earnings has moved up 9% in the past 60 days.
Applied Industrial has a trailing four-quarter earnings surprise of 28%, on average. AIT’s shares have gained 13% in the past year.
Packaging Corp has an estimated earnings growth rate of 12.6% for 2022. In the past 60 days, the Zacks Consensus Estimate for the year’s earnings has been revised upward by 12%.
Packaging Corp has a trailing four-quarter earnings surprise of 22.8%, on average. In the past year, the company’s shares have appreciated 15%.