Sonoco Products (SON) AI Stock Analysis

• Market Cap: $5.68B
• Dividend Yield: 4.33%
• Average Volume (3M): 1.09M
• Price to Earnings (P/E): 14.5
• Beta (1Y): 0.60
• Revenue Growth: 8.31%
• EPS Growth: -99.39%
• Country: US
• Employees: 23,400
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Packaging & Containers
• EPS (TTM): 1.05
• Shares Outstanding: 98,633,010
• 10 Day Avg. Volume: 1,347,450
• 30 Day Avg. Volume: 1,085,457
• PEG Ratio: 0.08
• Price to Book (P/B): 1.20
• Price to Sales (P/S): 0.58
• P/FCF Ratio: 11.06
• Enterprise Value/Market Cap: 1.77
• Enterprise Value/Revenue: 1.34
• Enterprise Value/Gross Profit: 6.41
• Enterprise Value/Ebitda: 8.87
• 1Y Price Target: $64.14
• Price Target Upside: 13.62% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 5.96
• Revenue Forecast (FY): $7.44B

• Rating: 71 Outperform
• Price Target: $57.00 ▲(0.97% Upside)
• Action: Upgraded Date: 02/18/26
• Date: Action: Upgraded 02/18/26

The score is driven mainly by improving financial performance (2025 rebound, better leverage, and positive free cash flow) and supportive technical momentum (price above key moving averages with a positive MACD). This is tempered by weak valuation signals due to an extremely high P/E, despite an attractive dividend yield, while the earnings call was constructive with clear growth, margin, cash flow, and deleveraging targets.

Positive Factors

Portfolio simplification & market focus

Completing the portfolio transformation and consolidating into two market-leading businesses reduces complexity and concentrates management resources. A simpler structure improves go-to-market, cost synergies and capital allocation, increasing the likelihood of sustained margin expansion and steadier earnings over the medium term.

Strong cash generation

Robust free cash flow, including normalized operating cash flow near $906M, provides durable funding for debt reduction, targeted capex (~4% of sales), and future shareholder returns. Reliable cash conversion underpins multi-year deleveraging targets and supports reinvestment in productivity and margin initiatives.

Rapid deleveraging progress

Material debt reduction (using divestiture proceeds and FCF) materially improved balance-sheet flexibility and reduced financial risk. Sustained deleveraging increases headroom for strategic investment and lowers interest burden, making planned margin and cash targets more attainable over the next 2–3 years.

Negative Factors

Residual elevated leverage

Despite marked improvement, material debt remains and management targets further reduction below ~2.5x. Ongoing leverage constrains capital allocation choices, limits ability to pursue sizeable bolt‑on M&A or large buybacks, and leaves the company vulnerable to weaker cash flow or rising rates.

Modest, cyclical profitability

Historical swings (including a net loss in 2021 and margin compression in 2024) show earnings sensitivity to cycle and mix. Modest net margins limit the buffer to absorb input cost shocks and require sustained operational improvements to reliably deliver higher ROE and durable cash returns.

Volume/mix softness & price sensitivity

Weakness in volumes and highly price-sensitive end markets (especially in EMEA and certain consumer categories) pose a structural headwind to organic growth and margin sustainability. The company must deliver ongoing commercial discipline and innovation to avoid persistent margin erosion.

Sonoco Products Business Overview & Revenue Model

Company Description

Sonoco Products Company, together with its subsidiaries, manufactures and sells industrial and consumer packaging products in North and South America, Europe, Australia, and Asia. The company operates through two segments: Consumer Packaging and Industrial Paper Packaging. The Consumer Packaging segment round and shaped rigid paper containers; metal and peelable membrane ends and closures; thermoformed plastic trays and containers; printed flexible packaging; and global brand artwork management. The Industrial Paper Packaging segment provides fiber-based tubes, cones, and cores; fiber-based construction tubes; fiber-based protective packaging and components; wooden, metal, and composite wire and cable, as well as reels and spools; and recycled paperboard, corrugating medium, recovered paper, and material recycling services. Sonoco Products Company offers thermoformed rigid plastic trays and devices; custom-engineered molded foam protective packaging and components; temperature-assured packaging; injection molded and extruded containers, spools, and parts; retail security packaging, including printed backer cards, thermoformed blisters, and heat-sealing equipment; and paper amenities. The company sells its products in various markets, which include paper, textile, film, food, chemical, packaging, construction, and wire and cable. Sonoco Products Company was founded in 1899 and is headquartered in Hartsville, South Carolina.

How the Company Makes Money

Sonoco generates revenue through multiple streams, primarily by selling packaging products and services to a wide array of industries, including food and beverage, personal care, and pharmaceuticals. The company's revenue model includes the manufacturing and distribution of packaging materials, which are sold to both large multinational brands and smaller companies. Significant revenue is derived from its consumer packaging and industrial segments, with a focus on providing customized solutions that enhance product protection and shelf appeal. Additionally, Sonoco benefits from strategic partnerships and collaborations with key clients that drive long-term contracts and recurring revenue. The company also invests in innovative technologies and sustainable practices, which not only attract new customers but also help reduce costs and improve margins.

Sonoco Products Financial Statement Overview

Summary

Earnings rebounded in 2025 with strong revenue growth and improved operating/EBITDA margins, but net margins remain modest and profitability has been cyclical. Leverage improved sharply year over year, yet debt remains meaningful. Free cash flow is positive and grew in 2025, though cash conversion and operating cash flow coverage have been uneven.

Income Statement

Profitability improved meaningfully in 2025, helped by strong revenue growth (+22.87%) and higher operating and EBITDA margins versus 2024, with net margin rebounding to ~5.3%. However, results have been volatile over the cycle (including a net loss in 2021 and margin compression in 2024), and current net margins remain modest for the recent revenue step-up.

Balance Sheet

Leverage is moderate-to-elevated, with debt-to-equity improving sharply in 2025 (~1.34) from a stressed 2024 level (~3.21), indicating better balance-sheet positioning year over year. Return on equity also improved to ~10.9% in 2025, but remains below peak levels in 2022–2023, and the balance sheet still carries a sizable debt load that can pressure flexibility if operating conditions weaken.

Cash Flow

Cash generation is solid with positive free cash flow across recent years, and 2025 free cash flow grew strongly (+31.6%). That said, cash conversion is not consistently strong: free cash flow was only ~57% of net income in 2025, and operating cash flow coverage has been relatively low in 2024–2025 versus 2023, suggesting working-capital or timing headwinds.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	7.52B	5.31B	5.44B	5.86B	5.59B
Gross Profit	1.57B	1.14B	1.20B	1.23B	1.06B
EBITDA	1.23B	610.97M	965.41M	869.63M	148.19M
Net Income	396.38M	163.95M	474.96M	466.44M	-85.48M
Balance Sheet
Total Assets	11.16B	12.51B	7.19B	7.05B	5.07B
Cash, Cash Equivalents and Short-Term Investments	378.40M	431.01M	138.90M	227.44M	170.98M
Total Debt	4.85B	7.30B	3.23B	3.53B	1.84B
Total Liabilities	7.53B	10.22B	4.76B	4.98B	3.22B
Stockholders Equity	3.63B	2.27B	2.42B	2.07B	1.84B
Cash Flow
Free Cash Flow	392.73M	440.61M	519.84M	180.28M	42.65M
Operating Cash Flow	689.78M	833.85M	882.92M	509.05M	298.67M
Investing Cash Flow	2.19B	-4.11B	-619.34M	-1.74B	-165.90M
Financing Cash Flow	-2.98B	3.67B	-351.99M	1.29B	-513.54M

Sonoco Products Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 56.45
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SON, the sentiment is Positive. The current price of 56.45 is above the 20-day moving average (MA) of 51.17, above the 50-day MA of 47.48, and above the 200-day MA of 44.44, indicating a bullish trend. The MACD of 2.46 indicates Negative momentum. The RSI at 74.18 is Negative, neither overbought nor oversold. The STOCH value of 78.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SON.

Sonoco Products Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SON	71 Outperform	$5.68B	14.48	20.01%	4.33%	8.31%	-99.39%
SEE	71 Outperform	$6.17B	15.58	40.42%	1.94%	-1.22%	-0.76%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
SLGN	60 Neutral	$5.10B	17.86	13.53%	1.97%	11.10%	6.54%
REYN	60 Neutral	$5.04B	16.76	13.70%	3.97%	0.76%	-17.69%
GPK	58 Neutral	$3.86B	8.84	13.99%	2.91%	-3.93%	-27.37%
AMBP	56 Neutral	$2.86B	-353.73	―	9.90%	10.34%	87.86%

Sonoco Products Corporate Events

Sonoco Outlines 2026–2028 Strategy at Investor Day

On February 17, 2026, Sonoco Products hosted its 2026 Investor Day, where President and CEO Howard Coker and senior leaders outlined an updated value creation strategy centered on sustainable growth, margin improvement and disciplined capital allocation. Management highlighted that portfolio simplification has left Sonoco with two market-leading businesses and a platform they believe is positioned for more consistent earnings growth and strong cash generation following a solid 2025.

For the 2026–2028 period, the company set targets of roughly $1.5 billion in adjusted EBITDA by 2028, about 200 basis points of margin expansion, and approximately $2.5 billion in cumulative operating cash flow, while keeping capital expenditures near 4% of sales. Sonoco also aims to reduce net leverage to below 2.5x by 2028 and increase capital returns through ongoing dividends and future share repurchases, with CFO Paul Joachimczyk stressing that planned margin gains are expected to come from an already embedded, enterprise-wide productivity system rather than a single initiative or a major shift in market conditions.

The most recent analyst rating on (SON) stock is a Buy with a $60.00 price target. To see the full list of analyst forecasts on Sonoco Products stock, see the SON Stock Forecast page.

Sonoco Products Adds Veteran Finance Executive to Board

On February 10, 2026, Sonoco Products appointed Craig L. Nix, the chief financial officer of First Citizens BancShares, Inc., to its Board of Directors as an independent member, assigning him to the Audit and Financial Policy committees, with plans for him to stand for election at the company’s 2026 Annual General Meeting. Announced publicly on February 12, 2026, the move brings a seasoned banking and corporate finance executive onto Sonoco’s board to support its ongoing strategy of portfolio simplification, organizational streamlining and capital investments, signaling a continued emphasis on financial discipline and governance as the packaging group navigates shifting market dynamics.

The most recent analyst rating on (SON) stock is a Buy with a $53.00 price target. To see the full list of analyst forecasts on Sonoco Products stock, see the SON Stock Forecast page.

Sonoco Products announces COO retirement and leadership changes

On January 20, 2026, Sonoco announced that Chief Operating Officer Rodger Fuller will retire on February 28, 2026, concluding a 40-year career with the packaging company that included leadership of global consumer and industrial operations and a recent role as interim head of its Metal Packaging EMEA business through the end of 2025. Sonoco said it will not name a new COO, instead having each business unit president report directly to President and CEO Howard Coker, signaling a streamlined leadership structure as the company continues its transformation as a global sustainable packaging leader and potentially altering reporting lines and governance dynamics for employees, customers and other stakeholders.

The most recent analyst rating on (SON) stock is a Buy with a $54.00 price target. To see the full list of analyst forecasts on Sonoco Products stock, see the SON Stock Forecast page.