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Sonoco Products Co SON

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Morningstar’s Analysis

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Sonoco Faced a Difficult 2020, but Ended on a High-Note; Raising our FVE to $46 Per Share from $42

Charles Gross Equity Analyst

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.

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Company Profile

Business Description

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.

1 North Second Street
Hartsville, SC, 29550
T +1 843 383-7000
Sector Consumer Cyclical
Industry Packaging & Containers
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 20,000