Company Reports

We will discontinue analyst coverage of Sonoco Products on or about Nov. 12.

Sonoco makes a wide range of consumer and industrial packaging, from Pringles cans to foam automotive bumpers to toilet paper cores. The company operates over 300 manufacturing facilities and serves customers across 85 countries, with North America accounting for roughly 75% of sales. Its 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; it now focuses on a few core businesses and has divested from nonprioritized products and markets like high-density film, European contract packaging, and more.

Second-quarter net sales for Sonoco rose almost 50% year over year, driven by the firm's acquisition of Eviosys in late 2024. Organic volumes in the quarter were mixed across its portfolio while some persistent demand headwinds in the industrial paper packaging business continued.

Sonoco makes a wide range of consumer and industrial packaging, from Pringles cans to foam automotive bumpers to toilet paper cores. The company operates over 300 manufacturing facilities and serves customers across 85 countries, with North America accounting for roughly 75% of sales. Its 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; it now focuses on a few core businesses and has divested from nonprioritized products and markets like high-density film, European contract packaging, and more.

Sonoco’s first-quarter results featured top-line revenue of $1.7 billion including the acquisition of Eviosys (rebranded as Sonoco Metal Packaging EMEA) and excluding the divestiture of TFP, which was in line with our expectations. Pricing was generally favorable, which was a welcomed change for Sonoco after material pricing headwinds last year. Sonoco’s exposure to tariffs appears limited as most of its products are sourced, produced, and sold locally. That said, steel for its metal can business is imported into the US and is subject to tariffs. Sonoco’s contracts contain pass-through provisions for raw material price increase though, so this should be passed through to its customers. While a slowdown in global gross domestic product growth or consumer spending would have an adverse effect on Sonoco, its portfolio transformation has increased its exposure to food end-markets, which should prove more resilient in a downturn. As such, we’ve maintained our $53 fair value estimate.

On April 2, President Donald Trump announced a wide array of tariffs on all US imports. For packaging producers, we see heightened risks in packaging demand, driven by a potential slowdown in consumer spending and further softening of industrial production. While packaging companies have different degrees of exposure to tariffs, and many will be able to offset the direct impact by passing through cost increases, a slowdown in demand could have a significant impact on their near-term results. Given the uncertainty around the duration of new tariffs and potential industry or regional exclusions, we are maintaining our fair value estimates.

Sonoco makes a wide range of consumer and industrial packaging, from Pringles cans to foam automotive bumpers to toilet paper cores. The company operates over 300 manufacturing facilities and serves customers across 85 countries, with North America accounting for roughly 75% of sales. Its 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; it now focuses on a few core businesses and has divested from nonprioritized products and markets like high-density film, European contract packaging, and more.

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.

Sonoco Products makes a wide range of consumer and industrial packaging, from Pringles cans to foam automotive bumpers to toilet paper cores. The company operates over 300 manufacturing facilities and serves customers across 85 countries, with North America accounting for roughly 75% of sales. Its 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; it now focuses on a few core businesses and has divested from nonprioritized products and markets like high-density film, European contract packaging, and more.

No-moat-rated Sonoco announced on Dec. 18 that it will sell its thermoformed and flexible packaging, or TFP, business to TOPPAN Holdings for $1.8 billion. This is an expected move by Sonoco as the company announced it had initiated a strategic review of its TFP business a few months ago. Sonoco intends to use the funds from this sale to pay down debt following its $3.9 billion acquisition of Eviosys earlier this year. Management expects the deal will close in the first half of 2025. We think the sale of the TFP business is largely value-neutral, and as such, we are maintaining our $53 fair value estimate.

No-moat-rated Sonoco reported third-quarter results that were largely in line with our expectations. Net sales declined 2% year over year, mainly due to price headwinds that were somewhat offset by volume gains. We are encouraged by the organic volume growth in the consumer packaging segment, but headwinds in Sonoco’s industrial paper packaging business persisted. Sonoco continues to execute on its portfolio overhaul, announcing multiple acquisitions, divestitures, and strategic reviews this year. While we think the company will benefit from a more concentrated portfolio, the full effect of these moves won’t be known for some time. As such, we’ve maintained our $53 fair value estimate.

Sonoco Products makes a wide range of consumer and industrial packaging, from Pringles cans to foam automotive bumpers to toilet paper cores. The company operates over 300 manufacturing facilities and serves customers across 85 countries, with North America accounting for roughly 75% of sales. Its 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; it now focuses on a few core businesses and has divested from nonprioritized products and markets like high-density film, European contract packaging, and more.

No-moat-rated Sonoco reported underwhelming second-quarter results as the company continued to face pricing headwinds. Net sales fell 5% year over year as growth in the industrial paper segment was not enough to offset declines in consumer packaging. Additionally, consolidated operating margins contracted 240 basis points to 8.6%. Sonoco also made progress in its portfolio realignment, divesting its protective solutions business earlier this year and exiting some thermoforming markets as the company works to remove noncore businesses. While near-term headwinds remain, we are encouraged by the recovery in industrials and metal packaging in the quarter. As such, we’ve maintained our $53 fair value estimate.

Sonoco Products makes a wide range of consumer and industrial packaging, from Pringles cans to foam automotive bumpers to toilet paper cores. The company operates over 300 manufacturing facilities and serves customers across 85 countries, with North America accounting for roughly 75% of sales. Its 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; it now focuses on a few core businesses and has divested from nonprioritized products and markets like high-density film, European contract packaging, and more.

Sonoco Products makes a wide range of consumer and industrial packaging, from Pringles cans to foam automotive bumpers to toilet paper cores. The firm operates over 300 manufacturing facilities and serves customers across 85 countries, with North America accounting for roughly 75% of sales. Its 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; it now focuses on a few core businesses and has divested from nonprioritized products and markets like high-density film, European contract packaging, and more.

Sonoco Products makes a wide range of consumer and industrial packaging, from Pringles cans to foam automotive bumpers to toilet paper cores. The firm operates over 300 manufacturing facilities and serves customers across 85 countries, with North America accounting for roughly 75% of sales. Its 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; it now focuses on a few core businesses and has divested from nonprioritized products and markets like high-density film, European contract packaging, and more.

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.

No-moat-rated Sonoco held its investor day on Feb. 22 and offered updates on the company’s core business segments and long-term outlook. The business environment for both consumer packaging and industrial paper packaging remains challenging, largely due to persistent inventory destocking and inflationary headwinds that have weighed on consumer spending. Nevertheless, our forecast calls for consolidated revenue to grow at a 3.4% compound annual growth rate over the next five years as the company recovers from a challenging 2023. The outlook provided at the investor day does not alter our long-term outlook, and we maintain our $55 fair value estimate.

No-moat-rated Sonoco reported middling fourth-quarter and full-year results, largely due to tepid consumer and industrial demand. Full-year net sales for each of the individual segments decreased year over year, resulting in a 6.5% decrease in 2023 revenue from the prior year. Fourth-quarter results were marginally better, with net sales declining only 2.5% year over year, largely due to the benefit of acquisitions. Adjusted earnings per share for the company came in at $5.26, which was toward the bottom of management's published guidance range. We maintain our $55 fair value estimate as the time value of money was offset by a slight decrease in our near-term forecast.

Sonoco Products makes a wide range of consumer and industrial packaging, from Pringles cans to foam automotive bumpers to toilet paper cores. The company operates over 300 manufacturing facilities and serves customers across 85 countries, with North America accounting for roughly 75% of sales. Its 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; it now focuses on a few core businesses and has divested from nonprioritized products and markets like high-density film, European contract packaging, and more.