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How Has Sealed Air Performed following Its 4Q15 and 2015 Results?

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Dec. 4 2020, Updated 10:52 a.m. ET

Price movement of Sealed Air

Sealed Air (SEE) has a market capitalization of $8.6 billion. SEE rose by 7.9% to close at $43.63 per share as of February 10, 2016. The stock’s price movements on a weekly, monthly, and year-to-date (or YTD) basis are 3.8%, 5.6%, and -2.2%, respectively.

At times, the stock has broken the support of all of its moving averages. Currently, SEE is trading 7.9% above its 20-day moving average, 2.9% above its 50-day moving average, and 8.7% below its 200-day moving average.

The Materials Select Sector SPDR ETF (XLB) invests 1.8% of its holdings in Sealed Air. The ETF tracks a market-cap–weighted index of US basic materials companies. The fund includes only the materials components of the S&P 500. The YTD price movement of XLB is -7.8% as of February 9, 2016.

The Vanguard Materials ETF (VAW) invests 1.5% of its holdings in Sealed Air. The ETF tracks a very broad market-cap–weighted index of US materials companies.

The market capitalizations of Sealed Air’s competitors are as follows:

  • Bemis Company (BMS) — $4.7 billion
  • AptarGroup (ATR) — $4.6 billion
  • Sonoco Products (SON) — $4.1 billion
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Performance of Sealed Air in 4Q15 and 2015

Sealed Air reported 4Q15 net sales of $1,753.9 million, a fall of 11.1% compared to net sales of $1,973.7 million in 4Q14. Its gross profit margin rose by 6.5% in 4Q15 compared to 4Q14.

Its net income and EPS (earnings per share) rose to $123.5 million and $0.62, respectively, in 4Q15, compared to $66.3 million and $0.31, respectively, in 4Q14.

2015 results

In 2015, SEE reported net sales of $7,031.5 million, a fall of 9.3% YoY (year-over-year). The company’s cost of sales as a percentage of net sales fell by 3.1%, and its operating profit rose by 16.8% in 2015.

Its net income and EPS rose to $335.4 million and $1.62, respectively, in 2015, compared to $258.1 million and $1.20, respectively, in 2014.

Meanwhile, its cash and cash equivalents rose by 11.1%, and its inventories fell by 4.0% in 2015. Its current ratio fell to 1.2, and its debt-to-equity ratio rose to 13.1 in 2015, compared to a current ratio and a debt-to-equity ratio of 1.5 and 5.8, respectively, in 2014.

The price-to-earnings and price-to-sales ratios of Sealed Air are 33.1x and 1.2x, respectively, as of February 10, 2016.

Projections

The company has made the following projections for 2016:

  • Net sales to be ~$6.8 billion, which assumes an unfavorable impact of ~$400 million from foreign currency translation
  • Adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) in the range of $1.22–$1.19 billion, which assumes $65 million of unfavorable currency translation
  • Adjusted EPS in the range of $2.52–$2.60
  • Adjusted tax rate of 24%
  • Free cash flow of ~$550 million, including capital expenditures of ~$275 million and cash restructuring payments of ~$110 million
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