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Sonoco Products Co SON

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Stock XNYS Rating as of
$56.80 +1.19 (2.14%)
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Company Report

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Sonoco Earnings: Soft End Market Demand Pressures Volumes and Pricing; Shares Fairly Valued

Spencer Liberman,

No-moat-rated Sonoco reported lackluster first-quarter results. Volumes remained muted during the quarter, resulting in a 5.3% decline in sales year over year. This was driven by declines in all three segments as weak macroeconomic conditions continued to weigh on the company. Despite these challenges, the company was able to achieve operational efficiencies and generate adjusted earnings per share above the midpoint of guidance. Nevertheless, we've decreased our fair value estimate to $53 per share from $55 to reflect lower revenue during the year.

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Price vs Fair Value

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SON is trading within a range we consider fairly valued.
Price
$56.80
Fair Value
$29.00
Uncertainty
Medium
1-Star Price
$64.98
5-Star Price
$56.70
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Sonoco is diversified across a number of consumer and industrial packaging substrates, which reduces its reliance on certain substrates and end markets.

Bears

A few major customers account for a substantial amount of Sonoco's revenue. Those customers tend to have bargaining power, and if one of them were to switch to another packaging provider, it would have a materially adverse effect on Sonoco.

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Trading Information

Previous Close Price
$55.61
Day Range
$55.87–56.81
52-Week Range
$49.98–63.74
Bid/Ask
$50.00 / $56.90
Market Cap
$5.58 Bil
Volume/Avg
513,735 / 450,394

Key Statistics

Price/Earnings (Normalized)
11.41
Price/Sales
0.84
Dividend Yield (Trailing)
3.59%
Dividend Yield (Forward)
3.66%
Total Yield
3.76%

Company Profile

Over its 100-year-plus history, Sonoco Products has steadily assembled a diverse portfolio of industrial and consumer packaging product offerings such as flexible and rigid plastics, reels and spools, pallets, and composite cans. The company serves a variety of consumer and industrial end markets throughout North America. Sonoco has raised its dividend each year for more than 30 years.
Sector
Consumer Cyclical
Industry
Packaging & Containers
Stock Style Box
Small Value
Total Number of Employees
23,000
Website
http://www.sonoco.com

Competitors

Valuation

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Metric
SON
SEE
AMC
Price/Earnings (Normalized)
 11.4110.8914.52
Price/Book Value
 2.318.563.61
Price/Sales
 0.840.931.05
Price/Cash Flow
 7.837.2110.40
Price/Earnings
SON
SEE
AMC

Financial Strength

Metric
SON
SEE
AMC
Quick Ratio
 0.770.620.61
Current Ratio
 1.311.331.29
Interest Coverage
 4.672.513.47
Quick Ratio
SON
SEE
AMC

Profitability

Metric
SON
SEE
AMC
Return on Assets (Normalized)
 5.96%6.18%5.88%
Return on Equity (Normalized)
 18.28%97.89%24.70%
Return on Invested Capital (Normalized)
 9.03%12.47%10.64%
Return on Assets
SON
SEE
AMC
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