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Sonoco Products (SON)
NYSE:SON
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Sonoco Products
(NYSE:SON)
Rating:70Outperform
Price Target:
$51.00
▲(4.98%Upside)
Positive Factors
Market Position
SON is now focused on three key areas with leadership positions: metal packaging, rigid paper packaging, and industrial paper packaging.
Strategic Direction
The appointment of Paul Joachimczyk as CFO is seen as further progression of the 'new Sonoco'.
Synergies and Growth
Synergy realization from integrating Eviosys is expected to bring growth opportunities and consolidation in metal cans.
Negative Factors
Economic Pressure
The Industrial business could be pressured with slowing economic activity, impacting growth.
Interest Expenses
Guidance for EPS and operating cash flow was trimmed due to higher interest expenses.
Leverage Concerns
The company's leverage is higher than it has maintained in the past, with 2025 leverage estimated at around 4.0x.
Sonoco Products (SON) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.80B
Dividend Yield4.29%
Average Volume (3M)837.37K
Price to Earnings (P/E)31.0
Beta (1Y)0.59
Revenue Growth0.92%
EPS GrowthN/A
CountryUS
Employees23,400
SectorConsumer Cyclical
Sector Strength71
IndustryPackaging & Containers
Share Statistics
EPS (TTM)1.37
Shares Outstanding98,627,980
10 Day Avg. Volume828,365
30 Day Avg. Volume837,367
Financial Highlights & Ratios
PEG Ratio-4.80
Price to Book (P/B)1.98
Price to Sales (P/S)0.00
P/FCF Ratio80.25
Enterprise Value/Market Cap1.08
Enterprise Value/Revenue0.26
Enterprise Value/Gross Profit5.48
Enterprise Value/Ebitda2.01
Forecast
1Y Price Target
$56.20Price Target Upside15.69% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
Sonoco Products Business Overview & Revenue Model
Company DescriptionSonoco Products Company is a global provider of consumer packaging, industrial products, protective packaging, and supply chain services. Founded in 1899 and headquartered in Hartsville, South Carolina, Sonoco operates in multiple sectors, including consumer packaging, paper and industrial converted products, and protective solutions. The company serves a wide range of industries with a focus on delivering innovative and sustainable packaging solutions.
How the Company Makes MoneySonoco Products Company generates revenue through the sale of its diverse range of packaging products and services. Its primary revenue streams include consumer packaging, which covers rigid paper and plastic containers, flexible packaging, and closures. The industrial products segment includes tubes, cores, and paper-based engineered carriers. Protective solutions provide custom-engineered protective packaging solutions. Additionally, Sonoco offers supply chain management services. The company's earnings are bolstered by long-term customer relationships and strategic partnerships in various industries, which facilitate steady demand for its products. Sonoco's focus on sustainability and innovation also plays a critical role in enhancing its market position and profitability.
Sonoco Products Earnings Call Summary
Earnings Call Date:Jul 23, 2025
(Q2-2025)
| % Change Since: -0.21%|
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong sales growth and margin expansion, particularly in the Consumer Packaging segment, driven by strategic acquisitions and synergy realization. However, macroeconomic pressures, delayed seasonal activities in Europe, and higher interest expenses posed challenges. Despite these lowlights, the overall sentiment is cautiously optimistic with a focus on strong operational performance and strategic initiatives.Q2-2025 Updates
Positive Updates
Record Net Sales Growth
Net sales grew 49% in Q2 2025, driven by the SMP EMEA acquisition, strong volume in the SMP U.S. business, and favorable pricing.
Consumer Packaging Segment Performance
The Consumer Packaging segment achieved a remarkable 115% growth in adjusted EBITDA, with strong volume and price performance, particularly in the metal U.S. business.
Industrial Segment Margin Expansion
Industrial segment adjusted EBITDA margins expanded by 290 basis points to 19%, marking the seventh consecutive quarter of margin improvement.
Successful Divestiture and Leverage Reduction
Completed the divestiture of Thermoformed and Flexible Packaging (TFP), reducing the net leverage ratio to below 3.8x.
Significant Synergy Realization
Projected $40 to $50 million in run rate synergies by the end of the year from SMP EMEA integration, with over $100 million in cost savings through 2026.
Negative Updates
Macroeconomic Pressures
Global macroeconomic pressures affected consumer and industrial demand, impacting overall performance.
Delayed European Packing Season
Q2 results were impacted by a delay in the start of the European vegetable packaging season, affecting SMP EMEA performance.
Higher Interest Expense
Higher-than-expected interest expenses negatively impacted earnings, with a $0.07 per share impact due to amortization fees and higher commercial paper balances.
Challenges in International Markets
Softness in Europe and other international markets contributed to a more cautious EPS guidance.
Company Guidance
During the Sonoco Second Quarter 2025 Earnings Conference Call, the company provided guidance indicating strong top line and bottom line growth, with net sales increasing by 49% and adjusted EBITDA up by 25%. The adjusted EBITDA margin improved by 100 basis points to 17.2%. The Consumer Packaging segment saw a 115% growth in adjusted EBITDA, driven by a 10% volume/mix gain in the U.S. metal business and the acquisition of Eviosys. The Industrial segment's adjusted EBITDA grew by 16% and margins expanded to 19%, marking the seventh consecutive quarter of margin improvement. Sonoco's full-year guidance maintained net sales between $7.75 billion and $8 billion, with adjusted EBITDA expected to range from $1.3 billion to $1.4 billion. However, the adjusted EPS is now targeted at the lower end of the previously provided range of $6 to $6.20 due to higher interest expenses and macroeconomic pressures.Sonoco Products Financial Statement Overview
Summary
Sonoco Products demonstrates a solid financial foundation with areas for improvement. Revenue growth is positive, but profitability margins and leverage levels present potential risks. Cash flow management shows mixed results, with strong operational cash generation but limited free cash flow.Income Statement
Sonoco Products shows moderate performance in revenue growth and profitability. The TTM data indicates a gross profit margin of 33.72% and net profit margin of 2.40%, reflecting a stable but low profitability profile. Revenue growth from the previous period is notable, signaling positive momentum. However, the EBIT margin of 5.97% and EBITDA margin of 8.87% suggest room for improvement in operational efficiency.74
Positive
Balance Sheet
The balance sheet presents a mixed financial position. The debt-to-equity ratio is relatively high at 98.52%, signaling potential leverage concerns. Return on equity stands at 6.22%, indicating moderate returns for shareholders. The equity ratio of 19.41% highlights a lower reliance on equity financing, which could increase financial risk.68
Positive
Cash Flow
Cash flow analysis reveals challenges in free cash flow generation with a recent decrease. The operating cash flow to net income ratio of 3.00 is strong and indicates efficient cash generation from operations. However, the free cash flow to net income ratio of 0.40 shows limited free cash flow relative to earnings, suggesting constraints on liquidity and reinvestment capacity.65
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 5.31B | 5.44B | 5.86B | 5.59B | 5.24B |
| Gross Profit | 1.14B | 1.20B | 1.23B | 1.06B | 1.05B |
| EBITDA | 610.97M | 965.41M | 869.63M | 148.19M | 591.93M |
| Net Income | 163.95M | 474.96M | 466.44M | -85.48M | 207.46M |
Balance Sheet | |||||
| Total Assets | 12.51B | 7.19B | 7.05B | 5.07B | 5.28B |
| Cash, Cash Equivalents and Short-Term Investments | 431.01M | 138.90M | 227.44M | 170.98M | 564.85M |
| Total Debt | 7.30B | 3.23B | 3.47B | 1.84B | 1.96B |
| Total Liabilities | 10.22B | 4.76B | 5.02B | 3.22B | 3.37B |
| Stockholders Equity | 2.27B | 2.42B | 2.07B | 1.84B | 1.91B |
Cash Flow | |||||
| Free Cash Flow | 440.61M | 519.84M | 189.90M | 55.82M | 521.96M |
| Operating Cash Flow | 833.85M | 882.92M | 509.05M | 298.67M | 705.62M |
| Investing Cash Flow | -4.11B | -619.34M | -1.75B | -173.49M | -127.01M |
| Financing Cash Flow | 3.67B | -351.99M | 1.33B | -513.54M | -162.87M |
Sonoco Products Technical Analysis
Positive
48.58
Price Trends
45.52
Positive
45.22
Positive
46.97
Positive
Market Momentum
0.72
Negative
66.86
Neutral
87.72
Negative
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 48.58 is above the 20-day moving average (MA) of 46.16, above the 50-day MA of 45.52, and above the 200-day MA of 46.97, indicating a bullish trend. The MACD of 0.72 indicates Negative momentum. The RSI at 66.86 is Neutral, neither overbought nor oversold. The STOCH value of 87.72 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SON.
Sonoco Products Risk Analysis
Sonoco Products disclosed 1 risk factors in its most recent earnings report. Sonoco Products reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Sonoco Products Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $5.99B | 20.76 | 14.52% | 1.39% | 1.99% | -5.30% | |
72 Outperform | $4.69B | 14.01 | 16.30% | 4.13% | -0.97% | 1.45% | |
70 Outperform | $4.80B | 30.97 | 3.97% | 4.29% | 0.92% | ― | |
68 Neutral | $7.10B | 11.53 | 20.62% | 1.81% | -6.28% | -7.43% | |
66 Neutral | $4.63B | 15.21 | 43.40% | 2.58% | -2.45% | -16.55% | |
63 Neutral | $17.10B | 10.79 | -8.01% | 2.94% | 1.62% | -25.73% | |
52 Neutral | $2.77B | ― | -69.06% | 10.31% | 8.39% | 72.18% |
* Consumer Cyclical Sector Average
Performance Comparison
SON
Sonoco Products
48.58
-1.01
-2.04%
GPK
Graphic Packaging
23.21
-3.64
-13.56%
SEE
Sealed Air
31.03
-4.55
-12.79%
SLGN
Silgan Holdings
55.37
9.07
19.59%
REYN
Reynolds Consumer Products
22.17
-4.24
-16.05%
AMBP
Ardagh Metal Packaging
3.88
0.64
19.75%
Sonoco Products Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Sonoco Products Appoints New Chief Financial Officer
Positive
Jun 17, 2025
On June 17, 2025, Sonoco Products Company announced the appointment of Paul Joachimczyk as Chief Financial Officer, effective June 30, 2025. Joachimczyk, who has a robust background in financial leadership across various industries, will replace Jerry Cheatham, the Interim CFO. This transition is part of Sonoco’s ongoing transformation efforts, with Joachimczyk expected to drive long-term value for shareholders through sound financial management and strong operating initiatives.
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.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.