Citi upgrades this packaging company that can rally more than 30%

Sealed Air could see an earnings revival, Citi says. Analyst Anthony Pettinari upgraded the packaging company to buy from neutral. He assigned a $41 price target, which implies a 30.5% rally

from Friday's close. "Sentiment on SEE (and the broader packaging space) has been highly negative given share price weakness, persistent vol challenges, and downward earnings

revisions," Pettinari said in a Monday note. "We see 3Q results as a potential catalyst, with upside from cost saves and reiterated volume outlook after a sharply lowered bar in

2Q." Sealed Air's stock has plunged about 37% this year as it navigates a post-Covid lower growth environment. In this quarter alone, the stock has tumbled more than 21%, as

weakness in its end markets led to a second-quarter revenue shortfall and a lower earnings and revenue forecast. Citi noted that the company's earnings growth will be driven by cost

savings from its three-year CTO2Grow program , which is expected to generate between $140 million and $160 million in annualized cost savings by the end of 2025. Sealed Air management may

still look toward more aggressive measures to improve the company's share price after experiencing poor stock performance and underlying headwinds, the analyst noted. "We see

significant upside to initial targets based on SEE's track-record of cost cutting under CEO Ted Doheny," Pettinari said. He added, however, that "with poor investor sentiment

& prolonged share price weakness, we think calls for packaging mgmt. teams to take more dramatic actions (asset sales, sharper cost cutting, exploration of M & A/go-private options)

could potentially grow louder." — CNBC's Michael Bloom contributed to this report.