Goldman Sachs Reiterates Neutral Rating on Pactiv Corp. (PTV)

Goldman Sachs is out with a research report this morning, where it reiterates its Neutral rating on Pactiv Corp. PTV; it has a $33.00 price target on the stock, up from $31.00. The GS analysts cited the company's recently reported quarterly earnings report, which was better than expected. The beat was driven by a lower effective tax rate, 14% vs. 36.5%. Revenues, EBITDA, and pre-tax income were in line with forecasts. The analysts noted that, in the consumer segment, PTV reported volumes were up 9% year over year with strong gains in private label and branded waste bags. In the foodservice segment, volumes grew 12% year over year with the PWP acquisition adding 800 bp to growth. As for valuation, the analysts remarked, “Our 12-month, DCF-based price target is $33 (was $31) as we roll forward our 10-year DCF model one year to reflect 4Q2011E net debt levels vs. 4Q2010E previously. Based on our 2011 estimates, PTV trades at 14.1X P/E and 7.9X EV/EBITDA vs. its peers at 11.2X and 6.9X, respectively.”