Sealed Air Corporation (NYSE:SEE) is scheduled to report Q3 earnings results on October 28, 2020.
The company is expected to report earnings of $0.66/share on revenue of $1.186 billion. The consensus earnings per share (EPS) of $0.66/share is based on a poll of 13 analysts and represents a growth in eps of 3.6% over the same quarter last year, when the company reported earnings of $0.64/share.
The revenue forecast of $1.186 billion based on a poll of 11 analysts implies a year-over-year (YoY) decline in revenue of −2.6%. Last year the company reported $1.218 billion in revenue for the quarter.
| Metric | Expected | Prior Year | YoY Change |
|---|---|---|---|
| Revenue | $1,186.36 | $1,218.50 | −2.6% |
| EPS | $0.66 | $0.64 | 3.6% |
Earnings Call Trends
Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.
What are your expectations from Sealed Air Corporation for earnings this quarter? Let us know in the comments!
| Quarter | Expected | Reported | Surprise | Result |
|---|---|---|---|---|
| Q2, 2020 | $0.55 | $0.76 | 38.3% | Beat |
| Q1, 2020 | $0.58 | $0.73 | 26.2% | Beat |
| Q4, 2019 | $0.75 | $0.78 | 3.4% | Beat |
| Q3, 2019 | $0.62 | $0.64 | 3.6% | Beat |
| Q2, 2019 | $0.64 | $0.80 | 25.2% | Beat |
| Q1, 2019 | $0.57 | $0.59 | 3.9% | Beat |
| Q4, 2018 | $0.67 | $0.75 | 11.8% | Beat |
| Q3, 2018 | $0.60 | $0.61 | 1.2% | Beat |
In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 11.3%.
| Report Date | Price Day Prior | Price Next Day | Change % | Result |
|---|---|---|---|---|
| August 6, 2020 | $36.64 | $40.77 | 11.3% | Increase |
| May 5, 2020 | $27.21 | $27.47 | 1.0% | Increase |
| February 11, 2020 | $37.14 | $35.86 | −3.4% | Decline |
| November 6, 2019 | $41.79 | $38.82 | −7.1% | Decline |
The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.53, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.53 implies a 0.6% chance of earnings manipulation.
Fundamentals And Technical Analysis
Sealed Air Corporation is currently trading at $40.72/share, down −1.4% for the day. The company is trading at approximately 93.9% of its 52-week high of $43.37/share. The company’s stock price is down −0.1% since the last earnings report and down −0.8% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 49.07 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.
The current share price implies a price-to-earnings (P/E) multiple of 15.15 and a forward P/E multiple of 14.01.
Sealed Air Corporation’s current share price also implies a price-to-book (P/B) multiple of −90.43. The following table summarizes some other key fundamental ratios:
| Metric | Value |
|---|---|
| Last Reported Fiscal Period Key | FY2020.Q2 |
| Period End Date | June 30, 2020 |
| Stock Price (Current) | $40.72 |
| P/E Ratio | 15.2x |
| P/E Ratio (Fwd) | 14.0x |
| PEG Ratio | 1.9 |
| Total Debt / Total Capital | 37.6% |
| Levered Free Cash Flow | $376 million |
| EV / EBITDA | 10.6x |
Sealed Air Corporation is a mid-cap stock with a market capitalization of $6.339 billion and a total enterprise value of $9.929 billion. The company operates in the Materials sector and the Containers & Packaging industry.
Sealed Air Corporation provides food safety and security, and product protection solutions and equipment in North America, South America, Europe, the Middle East, Africa, and the Asia Pacific. It operates in two segments, Food Care and Product Care. The Food Care segment offers integrated packaging materials, equipment, and automation solutions to provide food safety and shelf life extension, and reduce resource use for perishable food processors in the smoked and processed meats, poultry, and dairy markets under the Cryovac, Cryovac Grip & Tear, Cryovac Darfresh, Cryovac Mirabella, Simple Steps, and Optidure brands. This segment sells its solutions directly to customers through its sales, marketing, and customer service personnel. The Product Care segment provides foam, corrugated, molded pulp, and wood packaging solutions to protect goods in shipping for the e-commerce, electronics, transportation, and industrial markets under the Bubble Wrap, Sealed Air, Instapak, and Korrvu brands, as well as offers automated bagging systems under the Autobag brand. This segment sells its solutions through supply distributors, as well as directly to fabricators, original equipment manufacturers, contract manufacturers, third-party logistics partners, e-commerce/fulfillment operations, and retail centers. Sealed Air Corporation was founded in 1960 and is headquartered in Charlotte, North Carolina.
