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Sealed Air (SEE) Soars 9.5%: Is Further Upside Left in the Stock?

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Sealed Air (SEE - Free Report) shares rallied 9.5% in the last trading session to close at $54.92. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 9.8% gain over the past four weeks.

Better-than-expected first-quarter 2021 results and a raised guidance for the full year have led to Sealed Air’s share price appreciation. In the first quarter of 2021, the company’s earnings per share improved 7% year over year to 78 cents as higher volumes and benefits from the company’s Reinvent SEE initiatives helped offset raw material inflation and rising costs related to the winter storm supply chain disruptions. Total revenues were up 8% year over year to $1.27 billion driven by strength in e-Commerce, food retail and equipment, and pickup in industrial activity.

For 2021, Sealed Air expects net sales in the range of $5.25 billion to $5.35 billion, higher than the prior expectation of $5.1 billion to $5.2 billion. This new range indicates an increase of 7% to 9% as reported and 6% to 8% in constant dollars. Adjusted earnings per share is now anticipated in the band of $3.40 to $3.55. The mid-point of the range suggests year-over-year growth of 9%. The company had previously provided a guidance range of $3.25-$3.40.

Price and Consensus

Price Consensus Chart for SEE

This packaging company is expected to post quarterly earnings of $0.71 per share in its upcoming report, which represents a year-over-year change of -2.7%. Revenues are expected to be $1.22 billion, up 4% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Sealed Air, the consensus EPS estimate for the quarter has been revised 1.5% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on SEE going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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