Sealed Air downgraded to Neutral on slower growth at UBS

UBS analyst Joshua Spector downgraded Sealed Air to Neutral from Buy with a price target of $44, down from $54. The analyst believes the company’s return to growth will take longer to play out. Automation strength had been a key tenet of the bull thesis, but Sealed Air’s backlog is now declining as customers reduce capex spend while reduced secondary packaging is negatively impacting protective volumes, the analyst tells investors in a research note. The firm also sees risks that the food business could have margin pressure from contractual price pass throughs over the next year. UBS thinks the stock will remain range-bound pending visibility to a stronger recovery in mid-to-late 2024.