Protective packaging specialist Sealed Air (SEE ) has a long history of innovation. Now, a slew of new products, including an inflatable Bubble Wrap called NewAir I.B., should boost what have been flattish operating margins. Ghansham Panjabi of Wachovia Securities, who rates the stock "outperform," says the inventor of Bubble Wrap (it also makes Jiffy protective mailers and Cryovac food packaging) has entered new fields. It has gone into laundry products, and in Europe it has launched shrink wrap. But Sealed Air's stock has been under pressure since April, when it posted first-quarter results below some analysts' forecasts. It fell from 59 to 51.53 now. Even so, Panjabi expects earnings to jump to $3.35 a share in 2006 -- higher than analysts' consensus estimate of $3.07 -- up from $2.70 in 2005, lifted by new products and stabilizing raw material costs. Stewart Scharf of Standard & Poor's rates the stock a "buy" based on "favorable earnings prospects" aided by projected increased unit sales, higher prices, and lower raw material costs. His price target for the stock: 67.
Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.
By Gene G. Marcial