Resilient Supermarket Spending Mitigates Sonoco's Second-Quarter Coronavirus Impact

Under the circumstances, Sonoco's second quarter held up well. Its consumer segment, which sells a wide variety of food packaging, achieved 2% sales growth versus the prior year. While it wasn't enough to offset sharp declines in industrial-oriented segments, it softened the blow. Consolidated sales fell 8.4% from the preceding year, with adjusted net income down 16%. Despite what may sound like a dreary quarter, we've raised our fair value estimate to $42 per share from $41, based on a healthier near-term outlook for the consumer segment and time-value of money effects. Our no-moat rating is unchanged.