NEW YORK ( TheStreet) -- Sealed Air Corporation (NYSE: SEE) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow. Highlights from the ratings report include:
- SEE's revenue growth trails the industry average of 23.1%. Since the same quarter one year prior, revenues rose by 11.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- SEALED AIR CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SEALED AIR CORP increased its bottom line by earning $1.45 versus $1.36 in the prior year. This year, the market expects an improvement in earnings ($1.77 versus $1.45).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Containers & Packaging industry and the overall market, SEALED AIR CORP's return on equity is below that of both the industry average and the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Containers & Packaging industry. The net income has decreased by 2.8% when compared to the same quarter one year ago, dropping from $66.90 million to $65.00 million.