Sealed Air (NYSE:SEE) was lifted to Buy from Neutral at Citi with an unchanged price target of $41 per share in a note Monday.
Citi analysts said in their short note to clients that the company's 2024 earnings growth and portfolio optionality are in focus.
"We’re upgrading SEE to Buy with a $41 TP on: 1) line-of-sight to +MSD% EBITDA growth Y/Y in ’24 on easier-to-achieve cost saves and vol inflection, 2) supportive valuation (trading ~8x NTM EBITDA vs. 9.5x 5-year avg.), 3) potential for portfolio actions (asset sales, accelerated cost-cutting, transformative M&A) to move the needle," they explained.
"Sentiment on SEE (and the broader packaging space) has been highly negative given share price weakness (-37% YTD), persistent vol challenges (Protective -18% Y/Y in 1H), and downward earnings revisions (no EBITDA growth expected in ’23)."
However, the firm sees the company's 3Q results as a potential catalyst, noting that the stock is "positioned to outperform as negative earnings revisions end."