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Sonoco Products (SON)
NYSE:SON
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Sonoco Products
(NYSE:SON)
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Rating:65Neutral
Price Target:
$50.00
â–²(7.97% Upside)
Sonoco Products' strong financial performance and positive earnings call are major strengths, contributing to a solid overall score. However, technical indicators suggest limited momentum, and valuation concerns due to a negative P/E ratio weigh on the score. The attractive dividend yield provides some support.
Positive Factors
Revenue Growth
Sonoco's significant revenue growth indicates strong market demand and effective business strategies, enhancing its competitive position.
Debt Reduction
Reducing leverage through divestitures improves financial flexibility and reduces risk, supporting long-term financial health.
Synergy Savings
Achieving synergy savings enhances operational efficiency and cost-effectiveness, boosting profitability and competitive advantage.
Negative Factors
Macroeconomic Pressures
Macroeconomic challenges can dampen demand across sectors, potentially impacting revenue and profitability in the medium term.
Higher Interest Expense
Increased interest expenses can erode net earnings, affecting cash flow and limiting investment in growth opportunities.
European Market Challenges
Challenges in Europe can hinder revenue growth in a key market, impacting overall performance and strategic goals.
Sonoco Products (SON) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.57B
Dividend Yield4.53%
Average Volume (3M)904.31K
Price to Earnings (P/E)31.0
Beta (1Y)0.63
Revenue Growth0.90%
EPS Growth-118.86%
CountryUS
Employees23,400
SectorConsumer Cyclical
Sector Strength84
IndustryPackaging & Containers
Share Statistics
EPS (TTM)1.37
Shares Outstanding98,631,070
10 Day Avg. Volume1,005,789
30 Day Avg. Volume904,313
Financial Highlights & Ratios
PEG Ratio-0.45
Price to Book (P/B)2.12
Price to Sales (P/S)0.91
P/FCF Ratio10.94
Enterprise Value/Market Cap2.14
Enterprise Value/Revenue1.73
Enterprise Value/Gross Profit8.12
Enterprise Value/Ebitda13.61
Forecast
1Y Price Target
$55.14Price Target Upside19.07% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Sonoco Products Business Overview & Revenue Model
Company DescriptionSonoco 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 MoneySonoco generates revenue through multiple key streams, primarily by manufacturing and selling a diverse range of packaging products and services. The company's revenue model includes sales from consumer packaging, which encompasses flexible and rigid packaging solutions, and industrial products, such as paperboard tubes and cores. Additionally, Sonoco earns revenue from its protective solutions segment, which provides packaging that safeguards products during shipping and handling. Significant partnerships with notable companies in various industries help secure long-term contracts and consistent revenue. The company's focus on innovation and sustainability also attracts customers seeking eco-friendly packaging solutions, further enhancing its profitability.
Sonoco Products Earnings Call Summary
Earnings Call Date:Jul 23, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Neutral
Sonoco demonstrated strong financial performance with significant growth in net sales and adjusted EBITDA, driven by successful consumer packaging and industrial segments. However, macroeconomic challenges, particularly in Europe, and higher interest expenses tempered earnings growth. The company remains focused on synergy realization and debt reduction, with promising growth initiatives set for future gains.Q2-2025 Updates
Positive Updates
Strong Financial Performance
Net sales grew 49% and adjusted EBITDA was up 25% with a 100 basis points expansion in adjusted EBITDA margin to 17.2%.
Consumer Packaging Segment Success
Achieved 115% growth in adjusted EBITDA due to a 10% volume/mix gain in the metal U.S. business and the Eviosys acquisition.
Industrial Segment Margin Improvement
Industrial segment grew adjusted EBITDA by 16%, with EBITDA margins expanding to 19%, marking the seventh consecutive quarter of margin improvement.
Successful Divestiture and Debt Reduction
Divested Thermoformed and Flexible Packaging, reducing net leverage ratio to below 3.8x.
Synergy Achievements
Projected $40 to $50 million in synergy savings by the end of 2025 for SMP EMEA, with a line of sight to greater than $100 million in cost savings through 2026.
New Growth Initiatives
Secured a multiyear contract with a pet food customer in Eastern Europe for up to 400 million incremental units annually.
Negative Updates
Macroeconomic Pressures
Impacted by global macroeconomic pressures which affected consumer and industrial demand.
European Market Challenges
Delay in the European packing season and difficult macroeconomic conditions in Europe affected performance.
Higher Interest Expense
Total adjusted earnings grew only 7% due to higher-than-expected interest expense.
Impact of Sardine Availability
Decline in sardine availability in Africa further reduced volumes for SMP EMEA.
Stranded Costs
Encountered stranded corporate costs due to divestitures, impacting the financials.
Company Guidance
In the Sonoco Second Quarter 2025 Earnings Conference Call, the company reported a robust performance with a 49% increase in net sales and a 25% rise in adjusted EBITDA, leading to a 100 basis points expansion in adjusted EBITDA margin to 17.2%. The Consumer Packaging segment saw a remarkable 115% growth in adjusted EBITDA, driven by 10% volume/mix gains in the U.S. metal business and the recent acquisition of Eviosys, now rebranded as Sonoco Metal Packaging EMEA. The Industrial segment also posted a 16% increase in adjusted EBITDA, with margins expanding for the seventh consecutive quarter to 19% due to favorable pricing and productivity enhancements. Despite these gains, total adjusted earnings grew by only 7%, impacted by higher-than-expected interest expenses. Looking ahead, Sonoco maintains its full-year guidance, anticipating net sales between $7.75 billion and $8 billion, and adjusted EBITDA in the range of $1.3 billion to $1.4 billion, while targeting the lower end of its adjusted EPS range of $6 to $6.20 due to interest expense pressures.Sonoco Products Financial Statement Overview
Summary
Sonoco Products shows moderate financial performance with stable revenue growth but low profitability margins. The high debt-to-equity ratio indicates leverage concerns, while cash flow management reveals 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.78
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.65
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.72
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.66B | 5.31B | 5.44B | 5.86B | 5.59B | 5.24B |
| Gross Profit | 1.20B | 1.14B | 1.20B | 1.23B | 1.06B | 1.05B |
| EBITDA | 718.37M | 610.97M | 965.41M | 869.63M | 148.19M | 591.93M |
| Net Income | 555.81M | 163.95M | 474.96M | 466.44M | -85.48M | 207.46M |
Balance Sheet | ||||||
| Total Assets | 11.97B | 12.51B | 7.19B | 7.05B | 5.07B | 5.28B |
| Cash, Cash Equivalents and Short-Term Investments | 329.80M | 431.01M | 138.90M | 227.44M | 170.98M | 564.85M |
| Total Debt | 705.06M | 7.30B | 3.23B | 3.47B | 1.84B | 1.96B |
| Total Liabilities | 8.72B | 10.22B | 4.76B | 5.02B | 3.22B | 3.37B |
| Stockholders Equity | 3.25B | 2.27B | 2.42B | 2.07B | 1.84B | 1.91B |
Cash Flow | ||||||
| Free Cash Flow | 143.77M | 440.61M | 519.84M | 189.90M | 55.82M | 521.96M |
| Operating Cash Flow | 543.70M | 833.85M | 882.92M | 509.05M | 298.67M | 705.62M |
| Investing Cash Flow | -2.36B | -4.11B | -619.34M | -1.75B | -173.49M | -127.01M |
| Financing Cash Flow | 2.07B | 3.67B | -351.99M | 1.33B | -513.54M | -162.87M |
Sonoco Products Technical Analysis
Neutral
46.31
Price Trends
46.18
Positive
45.33
Positive
45.69
Positive
Market Momentum
0.27
Positive
48.21
Neutral
34.71
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SON, the sentiment is Neutral. The current price of 46.31 is below the 20-day moving average (MA) of 46.74, above the 50-day MA of 46.18, and above the 200-day MA of 45.69, indicating a neutral trend. The MACD of 0.27 indicates Positive momentum. The RSI at 48.21 is Neutral, neither overbought nor oversold. The STOCH value of 34.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SON.
Sonoco Products Risk Analysis
Sonoco Products disclosed 2 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 (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | 4.79B | 15.43 | 14.48% | 4.04% | -0.49% | -13.92% | |
67 Neutral | 5.78B | 11.05 | 16.59% | 2.20% | -5.05% | -24.52% | |
65 Neutral | $4.57B | 30.97 | 3.98% | 4.53% | 0.90% | -118.86% | |
65 Neutral | 5.02B | 16.72 | 30.65% | 2.35% | -2.00% | -18.50% | |
61 Neutral | 4.58B | 15.20 | 13.59% | 1.85% | 5.49% | -1.01% | |
58 Neutral | 2.31B | -135.92 | -2.15% | 10.36% | 8.39% | 72.18% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
Performance Comparison
SON
Sonoco Products
46.31
-5.60
-10.79%
GPK
Graphic Packaging
19.51
-9.04
-31.66%
SEE
Sealed Air
34.10
-0.46
-1.33%
SLGN
Silgan Holdings
42.80
-7.75
-15.33%
REYN
Reynolds Consumer Products
22.79
-7.14
-23.86%
AMBP
Ardagh Metal Packaging
3.86
0.60
18.40%
Sonoco Products Corporate Events
Business Operations and StrategyM&A Transactions
Sonoco Products Sells ThermoSafe Unit for $725 Million
Positive
Sep 8, 2025
On September 7, 2025, Sonoco Products Company announced the sale of its ThermoSafe business unit to Arsenal Capital Partners for up to $725 million. This transaction is part of Sonoco’s strategy to streamline its operations into two core global business segments, with the proceeds expected to reduce existing debt and support the company’s portfolio simplification and organizational streamlining efforts.
The most recent analyst rating on (SON) stock is a Hold with a $48.00 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.