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5 Reasons To Dump Sealed Air (SEE) Stock from Your Portfolio
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Sealed Air Corporation (SEE - Free Report) has been disappointing investors of late. Shares of this specialty packaging service provider to a diverse set of end markets has dipped 4.2% year to date.
Estimates Moving South
The estimates for the company for first-quarter 2017, fiscal 2017 and fiscal 2018, have moved south in the past 60 days, reflecting the negative outlook of analysts. For the first quarter, the estimate has gone down 17% to 48 cents per share in the past 60 days.
For fiscal 2017, the estimate has dropped 7% to $2.73 in the past 60 days. For fiscal 2018, the estimate has declined 8% to $2.97 per share.
Weaker-Than-Expected 2017 Guidance
Sealed Air’s guidance for 2017 has been tepid due to unfavorable impact of currency and weaker-than-anticipated growth in the Diversey Care segment owing to the brand licensing expiration with SC Johnson. Organic revenue growth of 2.5% will be more than neutralized by a 3% negative impact from foreign currency translation. Net sales will be flat compared with 2016.
EBITDA of $1.18 billion will be higher year over year and will include approximately $40 million of unfavorable currency translation. Additionally, a higher tax rate of 23% has led to earnings per share guidance of $2.70. Further, it included approximately 14 cents per share of unfavorable currency translation. The guidance reflects a slower global GDP growth. For 2017, GDP growth projection is at 2.3%, down from the prior figure of 2.6%.
Falling Behind the Industry
Sealed Air’s stock has dipped 8.6% in the past one year, underperforming the Zacks categorized Containers – Paper/ Plastics sub industry’s gain of 12.2%.
Near-Term Headwinds Remain
Sealed Air generates around 33% of total company sales from the European region. The company anticipates that the recent geopolitical events in Europe and the Middle East to have an effect on business. Sealed Air’s results in Australia will continue to be affected by declines in the beef market, albeit to a lesser degree as compared with 2016. Further, it continues to face weakness in industrial-based businesses which is expected to continue in 2017 as well.
Unfavorable Zacks Rank
Sealed Air currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
Some better-ranked stocks in the sector include Casella Waste Systems, Inc. (CWST - Free Report) , Lawson Products, Inc. and Global Brass and Copper Holdings, Inc. .
Global Brass and Copper Holdings’ estimates for fiscal 2017 have gone up 3% in the past 30 days while Lawson Products’ estimates for fiscal 2017 have gone up 17%. Both carry a Zacks Rank #2 (Buy).
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5 Reasons To Dump Sealed Air (SEE) Stock from Your Portfolio
Sealed Air Corporation (SEE - Free Report) has been disappointing investors of late. Shares of this specialty packaging service provider to a diverse set of end markets has dipped 4.2% year to date.
Estimates Moving South
The estimates for the company for first-quarter 2017, fiscal 2017 and fiscal 2018, have moved south in the past 60 days, reflecting the negative outlook of analysts. For the first quarter, the estimate has gone down 17% to 48 cents per share in the past 60 days.
For fiscal 2017, the estimate has dropped 7% to $2.73 in the past 60 days. For fiscal 2018, the estimate has declined 8% to $2.97 per share.
Weaker-Than-Expected 2017 Guidance
Sealed Air’s guidance for 2017 has been tepid due to unfavorable impact of currency and weaker-than-anticipated growth in the Diversey Care segment owing to the brand licensing expiration with SC Johnson. Organic revenue growth of 2.5% will be more than neutralized by a 3% negative impact from foreign currency translation. Net sales will be flat compared with 2016.
EBITDA of $1.18 billion will be higher year over year and will include approximately $40 million of unfavorable currency translation. Additionally, a higher tax rate of 23% has led to earnings per share guidance of $2.70. Further, it included approximately 14 cents per share of unfavorable currency translation. The guidance reflects a slower global GDP growth. For 2017, GDP growth projection is at 2.3%, down from the prior figure of 2.6%.
Falling Behind the Industry
Sealed Air’s stock has dipped 8.6% in the past one year, underperforming the Zacks categorized Containers – Paper/ Plastics sub industry’s gain of 12.2%.
Near-Term Headwinds Remain
Sealed Air generates around 33% of total company sales from the European region. The company anticipates that the recent geopolitical events in Europe and the Middle East to have an effect on business. Sealed Air’s results in Australia will continue to be affected by declines in the beef market, albeit to a lesser degree as compared with 2016. Further, it continues to face weakness in industrial-based businesses which is expected to continue in 2017 as well.
Unfavorable Zacks Rank
Sealed Air currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
Some better-ranked stocks in the sector include Casella Waste Systems, Inc. (CWST - Free Report) , Lawson Products, Inc. and Global Brass and Copper Holdings, Inc. .
Casella Waste’s estimate for fiscal 2017 has gone up 32% over the past 30 days. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Global Brass and Copper Holdings’ estimates for fiscal 2017 have gone up 3% in the past 30 days while Lawson Products’ estimates for fiscal 2017 have gone up 17%. Both carry a Zacks Rank #2 (Buy).
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>