Sealed Air (SEE - Get Report) has been a longstanding leader in food packaging but decided to diversify its business a year ago by paying more than $4 billion to acquire Diversey, which makes a range of cleaning products. Management moved too slowly to deliver on the promised cost cuts and cross-selling synergies. As a result, shares have lost half of their value since early 2011.
Yet on the recent conference call, Sealed Air noted that those gains will soon finally arrive, and they project lower expenses and risings sales. Right now, analysts only buy into the bottom-line forecast: Sales are expected to rise less than 2% (to $8 billion) though EPS is likely to shoot up 40% to around $1.40. Much of the gains should be in the form of free cash flow. That metric is expected to rise from $268 million in 2011 to around $560 million by 2014.
That rising free cash flow should help towards debt paydowns, taking stated book value even higher.