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Sonoco Products Co SON

Morningstar Rating
$55.89 −1.10 (1.93%)
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Company Report

Sonoco: Our Long-Term Outlook Remains Unchanged After Investor Day; Shares Fairly Valued

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.

Price vs Fair Value

SON is trading at a 2% premium.
Price
$55.89
Fair Value
$46.00
Uncertainty
Medium
1-Star Price
$51.76
5-Star Price
$49.60
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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News

Trading Information

Previous Close Price
$56.99
Day Range
$55.8656.92
52-Week Range
$49.9863.74
Bid/Ask
$55.85 / $57.20
Market Cap
$5.48 Bil
Volume/Avg
875,889 / 433,169

Key Statistics

Price/Earnings (Normalized)
10.63
Price/Sales
0.82
Dividend Yield (Trailing)
3.65%
Dividend Yield (Forward)
3.65%
Total Yield
3.84%

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

Competitors

Valuation

Metric
SON
SEE
AMC
Price/Earnings (Normalized)
10.6311.1914.05
Price/Book Value
2.269.383.58
Price/Sales
0.820.940.99
Price/Cash Flow
7.497.2010.23
Price/Earnings
SON
SEE
AMC

Financial Strength

Metric
SON
SEE
AMC
Quick Ratio
1.000.610.57
Current Ratio
1.761.301.25
Interest Coverage
5.422.503.43
Quick Ratio
SON
SEE
AMC

Profitability

Metric
SON
SEE
AMC
Return on Assets (Normalized)
7.30%6.47%5.84%
Return on Equity (Normalized)
22.98%111.92%24.28%
Return on Invested Capital (Normalized)
10.80%13.10%10.59%
Return on Assets
SON
SEE
AMC
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