Sealed Air upgraded by RBC Capital Markets as cost cuts, food growth drive turnaround

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RBC Capital Markets late Wednesday upgraded Sealed Air Corporation (NYSE:SEE [https://seekingalpha.com/symbol/SEE]) to Outperform from Sector Perform, citing stabilizing volumes in its packaging businesses, aggressive cost-cutting initiatives and the potential for meaningful upside in the company’s stock price.

PACKAGING SEGMENTS SHOW SIGNS OF RECOVERY

Analysts led by Arun Viswanathan expect Sealed Air’s (NYSE:SEE [https://seekingalpha.com/symbol/SEE]) protective packaging division, which has struggled since 2022, to stabilize by late 2025, with modest growth in industrial and electronics demand helping to lift volumes. Meanwhile, its food segment remains resilient, buoyed by steady demand for fresh protein in both retail and foodservice channels. The firm highlighted gains in Europe and Latin America as signs of competitive momentum.

AGGRESSIVE COST SAVINGS TARGETED

The report points to more than $100 million in expected annual savings through Sealed Air’s (SEE [https://seekingalpha.com/symbol/SEE]) “CTO2Grow” program, which includes supply chain streamlining, reduced general and administrative expenses, and offshoring initiatives. These savings could account for as much as 15–17% of projected earnings per share in fiscal 2025 and 2026. Analysts believe additional efficiency gains may follow in the years ahead.

VALUATION AND UPSIDE POTENTIAL

RBC raised its price target to $48 from $35, implying more than 30% upside from current levels. The analysts value Sealed Air (SEE [https://seekingalpha.com/symbol/SEE]) at nine times expected 2026 earnings before interest, taxes, depreciation and amortization, with the potential to reroute free cash flow to share buybacks once net leverage falls to 3 times. In a bullish scenario, shares could climb as high as $59, while downside risks could push them to $33.

HEADWINDS AND RISKS

The company still faces challenges, including weaker beef consumption in the United States -- a key end-market for its food packaging segment -- and macroeconomic pressures in Europe, where it has significant exposure. Longer-term secular shifts away from red meat could also pose risks to demand.

STRATEGIC RESET UNDER WAY

The analysts noted Sealed Air’s (SEE [https://seekingalpha.com/symbol/SEE]) push into automation and digitalization, with the goal of having half of its sales online by 2025. Combined with sustainability initiatives -- such as compostable trays and reduced-resin packaging -- the company is positioning itself for incremental growth of 6% to 9% over the long term.

MORE ON SEALED AIR

* Sealed Air: Potentially The Best Pick In Packaging [https://seekingalpha.com/article/4816012-sealed-air-potentially-the-best-pick-in-packaging]
* Sealed Air Corporation (SEE) Q2 2025 Earnings Call Transcript [https://seekingalpha.com/article/4808883-sealed-air-corporation-see-q2-2025-earnings-call-transcript]
* Sealed Air Corporation 2025 Q2 - Results - Earnings Call Presentation [https://seekingalpha.com/article/4808873-sealed-air-corporation-2025-q2-results-earnings-call-presentation]
* Cardboard-box demand slips, raising concerns about consumer spending [https://seekingalpha.com/news/4496803-cardboard-box-demand-slips-raising-concerns-about-consumer-spending]
* Sealed Air upgraded at J.P. Morgan on cash flow, recovery for protection segment [https://seekingalpha.com/news/4493415-sealed-air-upgraded-at-j-p-morgan-on-cash-flow-recovery-for-protection-segment]