Sonoco Earnings: Portfolio Overhaul Progresses as Legacy Businesses Benefit From Recovering Demand

No-moat-rated Sonoco reported solid fourth-quarter results that came with few surprises. Net sales rose by 2% year over year as volume gains and the closure of the Eviosys acquisition in December offset lower selling prices. The consumer packaging segment reported solid fourth-quarter results, driven by volume growth in both metal packaging and rigid paper containers. The industrial paper business continued to navigate a challenging operating environment, but organic volumes grew by a low-single-digit percentage in the quarter, signaling that the worst might be behind the segment. Demand across much of Sonoco’s portfolio is improving, and the integration of Eviosys should provide an additional boost in 2025, but integration and execution risks remain. As such, we’ve maintained our $53 fair value estimate.