12:25 PM EDT, 07/19/2024 (MT Newswires) -- Sealed Air ( SEE ) is expected to see weak sales volume, with prices and costs remaining steady or slightly declining, and significant debt, RBC Capital Markets said in a note sent Friday.

Analysts, including Arun Viswanathan, said they are revising down their estimated earnings before interest, taxes, depreciation, and amortization, or EBITDA, for 2024 and 2025 to $1.10 billion and $1.15 billion respectively, from $1.10 billion and $1.16 billion.

Sealed Air ( SEE ) might see easier year-over-year comparisons in its Protective segment in H2 2024. But, it is yet to see a positive increase in actual demand and has potential challenges ahead such as major customers shifting away from the company's traditional Bubble-Wrap and Instapak products. New products like fiber-based mailers in Protective and compostable trays in Food are unlikely to significantly boost sales or EBITDA in 2024.

"While Sealed Air ( SEE ) has guided relatively conservatively for 2024, new first-time Chief Executive Patrick Kivits could reset expectations even lower to establish a base from which Sealed Air ( SEE ) could beat and raise," the analysts said.

The analysts added that weak sales volume might lead to increased working capital needs, while key investments in new products are expected to keep capital expenditures around $240 million. Sealed Air ( SEE ) might only achieve its target of $325 million to $425 million in free cash flow for 2024 under the best circumstances.

RBC downgraded Sealed Air ( SEE ) to sector perform from outperform and cut its price target to $40 from $43.

Price: 35.70, Change: -0.69, Percent Change: -1.90