Sonoco Navigates Challenging Operating Environment Amid Softening Demand; Shares Fairly Valued

We are initiating coverage of Sonoco Products with a $55 fair value estimate and a no-moat rating. Sonoco produces a wide range of consumer and industrial packaging, from Pringles cans to foam automotive bumpers to toilet paper cores. Sonoco’s two primary segments, consumer packaging and industrial paper packaging, supply customers with both flexible and rigid packaging products that serve nearly any packaging need. In recent years, Sonoco has undergone a portfolio transformation, now focusing on a few core businesses and divesting from nonprioritized products and markets like high-density film, European contract packaging, and more.