In a report released today, Jeffrey Zekauskas from J.P. Morgan upgraded Sealed Air to a Buy, with a price target of $36.00.
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Jeffrey Zekauskas has given his Buy rating due to a combination of factors including Sealed Air’s strong free cash flow generation and its current valuation, which appears to be at a discount compared to its private market value. The Protective segment of Sealed Air is expected to experience a positive shift in business fundamentals after a prolonged period of declining volumes and prices, which could enhance the company’s profitability by 2026.
Furthermore, Sealed Air’s trading multiple is reasonable, and the company is projected to achieve a free cash flow yield of approximately 8% for both 2025 and 2026. The company’s EBITDA multiple is anticipated to decrease over the next few years, potentially increasing the share price. Despite past underperformance, the potential for improved volumes and profitability in the Protective segment, along with strong cash flow generation, supports the Buy rating and the increased price target of $36 by December 2026.