Sealed Air Corporation Just Beat EPS By 6.0%: Here's What Analysts Think Will Happen Next

Simply Wall St.
2024-11-10

Shareholders might have noticed that Sealed Air Corporation (NYSE:SEE) filed its quarterly result this time last week. The early response was not positive, with shares down 3.3% to US$35.40 in the past week. Sealed Air reported US$1.3b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.63 beat expectations, being 6.0% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sealed Air after the latest results.

Check out our latest analysis for Sealed Air

NYSE:SEE Earnings and Revenue Growth November 10th 2024

Following last week's earnings report, Sealed Air's 15 analysts are forecasting 2025 revenues to be US$5.46b, approximately in line with the last 12 months. Per-share earnings are expected to step up 12% to US$3.02. Before this earnings report, the analysts had been forecasting revenues of US$5.47b and earnings per share (EPS) of US$3.04 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of US$41.63, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Sealed Air analyst has a price target of US$54.00 per share, while the most pessimistic values it at US$33.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Sealed Air's revenue growth is expected to slow, with the forecast 0.9% annualised growth rate until the end of 2025 being well below the historical 3.3% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that Sealed Air is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Sealed Air. Long-term earnings power is much more important than next year's profits. We have forecasts for Sealed Air going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Sealed Air has 1 warning sign we think you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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