By Sam Boughedda

Sealed Air (NYSE:) was downgraded to Underweight from Impartial by JPMorgan analyst Jeffrey Zekauskas on Wednesday, though the analyst says it doesn’t replicate pessimism regarding Sealed Air’s enterprise prospects.

Zekauskas, who has a value goal of $62 on the inventory, mentioned it displays their inclination to put money into different equities within the varied materials sub-sectors.

“We expect that market outperformance at this juncture is extra more likely to stem from equities the place it’s attainable for earnings efficiency to be a lot greater than consensus values both by way of enterprise efficiency or acquisition; equities which have unusually excessive free money circulation yields or different uncommon worth traits; and equities that carry uncommon safety beneath recessionary circumstances,” the analyst wrote.

“We don’t view the earnings of Sealed Air as being at specific danger. We do, nevertheless, assume that it’s tough for the corporate to considerably outperform consensus estimates in a rising uncooked materials and a slowing demand surroundings,” he added.

The JPMorgan analyst defined that they don’t view Sealed Air as notably recession-resistant from an fairness efficiency standpoint. Nonetheless, they really feel the corporate is serious about rising its tools enterprise by way of acquisition, which, relying on the scale and valuation of attainable acquisitions, “might improve the near-term danger in these high-quality shares.”