Analyst Note| Charles Gross |
Sonoco wrapped up the year with robust results across most of its segments. Elevated packaged-good sales, vaccine shipments, and rebounding industrial activity led to strong sales and earnings growth in the quarter. Adjusted earnings per share rose roughly 9%, on sales growth of 5% versus the prior year. We've raised our near-term forecasts and expect 2021 adjusted EPS to land approximately in the middle of management's guidance, at $3.54 per share. Accordingly, we've increased our fair value estimate to $46 per share from $42. Our no-moat rating stands. With shares trading over 30% above our fair value estimate, we view Sonoco as overvalued at this time.