Jefferies Cuts Price Target on Sealed Air (SEE), Calls Shares Cheap Based on Long-Term Outlook
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Price: $42.15 --0%
Rating Summary:
13 Buy, 10 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
13 Buy, 10 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Jefferies is reaffirming its Buy rating on shares of Sealed Air (NYSE: SEE), but is lowering its price target from $24 to $22.
The firm is initiating its 2013 forecasts and is tweaking its 2012 estimates to reflect purchase price accounting, a slowdown in Diversey's business in Europe, and a lower tax rate of 30 percent.
The company's legacy business also looks to be performing better than expected based on the trend of the first two months for Q4.
Jefferies notes the benefit from SKU rationalization and streamlining Diversey's supply chain will begin to flow through during 2H12, while the real impact will be in 2013. At that point, Jefferies antiicpates the company will return more cash to its shareholders as its balance sheet becomes more stable.
An analyst at the firm comments, "While the deal is expected to be dilutive to EPS largely due to purchase price accounting, the FCF story (15% yield) is still very much intact and shares look compelling for investors with a value tilt and longer time horizon."
The firm is reducing its FY11 and FY12 EPS estimates from $1.70 and $1.84 to $1.56 and $1.44 to go inline with current market trends and the company's new model. For FY13, Jefferies initiated its earnings estimate at $1.96 per share.
For an analyst ratings summary and ratings history on Sealed Air click here. For more ratings news on Sealed Air click here.
Shares of Sealed Air closed at $17.14 yesterday.
The firm is initiating its 2013 forecasts and is tweaking its 2012 estimates to reflect purchase price accounting, a slowdown in Diversey's business in Europe, and a lower tax rate of 30 percent.
The company's legacy business also looks to be performing better than expected based on the trend of the first two months for Q4.
Jefferies notes the benefit from SKU rationalization and streamlining Diversey's supply chain will begin to flow through during 2H12, while the real impact will be in 2013. At that point, Jefferies antiicpates the company will return more cash to its shareholders as its balance sheet becomes more stable.
An analyst at the firm comments, "While the deal is expected to be dilutive to EPS largely due to purchase price accounting, the FCF story (15% yield) is still very much intact and shares look compelling for investors with a value tilt and longer time horizon."
The firm is reducing its FY11 and FY12 EPS estimates from $1.70 and $1.84 to $1.56 and $1.44 to go inline with current market trends and the company's new model. For FY13, Jefferies initiated its earnings estimate at $1.96 per share.
For an analyst ratings summary and ratings history on Sealed Air click here. For more ratings news on Sealed Air click here.
Shares of Sealed Air closed at $17.14 yesterday.
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