Sealed Air Slips to Hold - Analyst Blog

On Mar 29, Zacks Investment Research downgraded Sealed Air Corporation SEE to a Zacks Rank #3 (Hold) from Zacks Rank #2 (Buy).

Why the Downgrade?

On Feb 6, Sealed Air reported fourth-quarter 2013 adjusted earnings of 34 cents per share, up 6% from the year-ago earnings. The results, however, fell short of the Zacks Consensus Estimate of 37 cents per share.

For fiscal 2014, Sealed Air expects net sales to be relatively flat compared with net sales of $7.7 billion in 2013. Organic growth will be compensated by product rationalization and an estimated unfavorable impact of more than 2% from foreign currency translation.

For 2014, Sealed Air expects the growth rate of beef production in Latin America and AMAT (Asia, Middle East, Africa and Turkey), to be the same as in 2013. The company also anticipates single-digit decline in North America and Europe. With the protein market expected to deteriorate, growth in these regions will continue to depend on driving demand for value-added services including integration of systems automations, advanced food safety solutions and new products.

On Feb 2014, Sealed Air announced 3–8% price increase for most products in its Food Care and Product Care divisions in North America. However, economic uncertainty, unfavorable foreign currency translation and volatility in raw material price will continue to affect its results in 2014.

Other Stocks to Consider

Some better-ranked stocks worth considering in the sector include Ball Corporation BLL, Packaging Corporation of America PKG and Bemis Company, Inc. BMS. While Ball Corporation and Packaging Corporation of America carry a Zacks Rank #1 (Strong Buy), Bemis holds a Zacks Rank #2 (Buy).