Sonoco Products Company (SON) | Investment Case

1. Company Snapshot

1.a. Company Description

Sonoco Products Company, together with its subsidiaries, manufactures and sells industrial and consumer packaging products in North and South America, Europe, Australia, and Asia.The company operates through two segments: Consumer Packaging and Industrial Paper Packaging.The Consumer Packaging segment round and shaped rigid paper containers; metal and peelable membrane ends and closures; thermoformed plastic trays and containers; printed flexible packaging; and global brand artwork management.

The Industrial Paper Packaging segment provides fiber-based tubes, cones, and cores; fiber-based construction tubes; fiber-based protective packaging and components; wooden, metal, and composite wire and cable, as well as reels and spools; and recycled paperboard, corrugating medium, recovered paper, and material recycling services.Sonoco Products Company offers thermoformed rigid plastic trays and devices; custom-engineered molded foam protective packaging and components; temperature-assured packaging; injection molded and extruded containers, spools, and parts; retail security packaging, including printed backer cards, thermoformed blisters, and heat-sealing equipment; and paper amenities.The company sells its products in various markets, which include paper, textile, film, food, chemical, packaging, construction, and wire and cable.

Sonoco Products Company was founded in 1899 and is headquartered in Hartsville, South Carolina.

Show Full description

1.b. Last Insights on SON

The recent 3-month performance of Sonoco Products Company was driven by several positive factors. The company's transformation efforts, including the acquisition of Eviosys, are progressing, positioning SON for significant revenue and earnings growth. Consensus 2025 EPS estimates are higher than 2024, driven by earnings growth and multiple expansion. Additionally, SON offers a nearly 5% yield, a 42-year dividend growth streak, and trades at a deep discount to historical valuation. The company's recent capital investment to expand its production capacity in the adhesives and sealants market is also a positive development. Furthermore, SON has achieved prestigious Pet Sustainability Coalition (PSC) accreditation, demonstrating its commitment to sustainability.

1.c. Company Highlights

Last Price	41.43
Change Percentage	0.34%
Open	41.3
Previous Close	41.29
Market Cap ( Millions)	4086
Volume	591364
Year High	52.77
Year Low	38.65
M A 50	41.07
M A 200	44.6

FCF Yield	7.41%
Dividend Yield	5.09%
ROE	22.27%
Debt / Equity	48.61%
Net Debt / EBIDTA	167.51%
Price To Book	1.24
Price Earnings Ratio	6.58
Price To FCF	13.49
Price To sales	0.67
EV / EBITDA	6.68

2. Sonoco's Q3 2025 Earnings: A Strong Performance

Sonoco reported a robust third quarter, with net sales for continued operations increasing 57% to $2.1 billion, driven by the acquisition of Metal Packaging EMEA and strong pricing disciplines. Adjusted EBITDA was up 37% to $386 million, and the adjusted EBITDA margin improved by 130 basis points to 18.1%. The company's adjusted EPS was $1.92, representing a 29% year-over-year increase, beating analyst estimates of $1.91.

Publication Date: Oct -25

                                    📋 Highlights
                                    Record Financial Performance::
                                                Net sales grew 57% to $2.1B, adjusted EBITDA rose 37% to $386M with an 18.1% margin (up 130 bps).
ThermoSafe Sale Finalized::
                                                $725M transaction to divest ThermoSafe, completing portfolio transformation into 2 core segments.
Segment Outperformance::
                                                Consumer Packaging saw 117% sales growth and 112% EBITDA increase; Industrial Packaging reported 28% profit growth.
2026 Synergy Targets::
                                                $100M annual run-rate synergies planned by 2026, including $60M from U.S.-EMEA steel procurement integration.
Debt Reduction Strategy::
                                                Targeting 3-3.3x leverage ratio by 2026, prioritizing debt repayment over buybacks unless leverage meets threshold.

                                

Segment Performance

The Consumer Packaging segment saw sales and operating profit grow 117%, with adjusted EBITDA increasing 112%. The Industrial Packaging segment had an exceptional quarter, with operating profits up 28% and adjusted EBITDA up 21%. Metal Packaging EMEA's third quarter results modestly improved, with adjusted EBITDA up 9% and EBITDA margins improving to 18%. However, business activity was below expectations due to macroeconomic headwinds and weaker-than-anticipated seafood availability.

Guidance and Outlook

The company is tightening its guidance, with net sales in the range of $7.8 billion to $7.9 billion and adjusted EBITDA in the range of $1.3 billion to $1.35 billion. Analysts estimate next year's revenue growth at -0.8%, indicating a challenging operating environment. However, Sonoco is focused on commercial excellence, price-cost management, and share gain in the marketplace.

Valuation

With a P/E Ratio of 6.41 and an EV/EBITDA of 7.74, Sonoco's valuation appears reasonable. The company's ROE is 22.27%, indicating strong profitability. The Net Debt / EBITDA ratio is 1.98, suggesting a manageable debt burden. The Dividend Yield is 5.2%, providing a relatively stable source of return for investors.

Synergies and Cost Savings

Sonoco expects to achieve $100 million in annual run-rate synergies by the end of 2026, driven by the acquisition of Metal Packaging EMEA. The company is taking actions to improve its competitive position and drive cost savings, including rightsizing its manufacturing footprint and building out its commercial team. As Robert Coker noted, "we believe our consumer and industrial businesses have solid funnels in place, with several new products and market launches planned in 2026 and beyond."

3. NewsRoom

29,425 Shares in Sonoco Products Company $SON Bought by Advisors Asset Management Inc.

Dec -01

Source: defenseworld.net

Nokia introduces MantaRay SON to NTT DOCOMO's multi-vendor 5G network

Nov -25

Source: globenewswire.com

Sonoco Consolidating Consumer Packaging Businesses Under Two Geographies

Nov -10

Source: globenewswire.com

Spire Wealth Management Trims Position in Sonoco Products Company $SON

Nov -06

Source: defenseworld.net

LANZAJET ANNONCE AVOIR SÉLECTIONNÉ FLUOR CORPORATION POUR L'INGÉNIERIE DE BASE DU PROJET SPEEDBIRD, SON USINE PHARE DE PRODUCTION DE CARBURANT D'AVIATION DURABLE AU ROYAUME-UNI

Nov -05

Source: prnewswire.com

Is Sonoco Stock a Buy After Its Chairman of the Board Bought Over 2,500 Shares?

Nov -03

Source: fool.com

Sonoco Completes Sale of ThermoSafe Unit to Arsenal Capital Partners

Nov -03

Source: globenewswire.com

D.A. Davidson & CO. Sells 1,164 Shares of Sonoco Products Company $SON

Oct -30

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.57%)

6. Segments

Consumer Packaging

Expected Growth: 7.5%

Sonoco's Consumer Packaging segment growth is driven by increasing demand for sustainable packaging, e-commerce growth, and rising consumer spending on packaged goods. Additionally, the company's focus on innovation, strategic acquisitions, and operational efficiencies contribute to its 7.5% growth rate.

Industrial Paper Packaging

Expected Growth: 7.8%

Sonoco Products Company's Industrial Paper Packaging segment growth of 7.8% is driven by increasing demand for sustainable packaging, growth in e-commerce, and rising consumer preference for eco-friendly products. Additionally, the company's strategic acquisitions, investments in innovation, and operational efficiencies have contributed to the segment's growth.

All Other

Expected Growth: 7.2%

Sonoco's All Other segment growth of 7.2% is driven by increasing demand for sustainable and e-commerce packaging solutions, expansion in emerging markets, and strategic acquisitions. Additionally, the company's focus on innovation, operational efficiency, and cost savings initiatives have contributed to the segment's growth.

7. Detailed Products

Paperboard Containers

Sonoco's paperboard containers are used for packaging of food, beverages, and other consumer products

Plastic Containers

Sonoco's plastic containers are used for packaging of food, beverages, and other consumer products

Composite Containers

Sonoco's composite containers are used for packaging of food, beverages, and other consumer products

Closures

Sonoco's closures are used for sealing of containers for food, beverages, and other consumer products

Packaging Services

Sonoco's packaging services provide customized packaging solutions for consumer goods companies

Display and Packaging

Sonoco's display and packaging solutions provide point-of-purchase displays and packaging for retail products

Protective Packaging

Sonoco's protective packaging solutions provide customized packaging solutions for fragile and sensitive products

8. Sonoco Products Company's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Sonoco Products Company is medium due to the availability of alternative packaging solutions. However, the company's focus on innovative and sustainable packaging solutions helps to mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is high due to the concentration of major consumer goods companies that Sonoco Products Company supplies to. These customers have significant negotiating power, which can impact Sonoco's pricing and profitability.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the availability of multiple suppliers for raw materials and the company's diversified supply chain. This reduces the dependence on any single supplier and gives Sonoco Products Company more negotiating power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the packaging industry, including significant capital investments and regulatory requirements. This makes it difficult for new companies to enter the market and compete with established players like Sonoco Products Company.

Intensity Of Rivalry

The intensity of rivalry in the packaging industry is medium due to the presence of several established players. However, Sonoco Products Company's focus on innovation and sustainability helps to differentiate it from competitors and reduce the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	55.90%
Debt Cost	4.98%
Equity Weight	44.10%
Equity Cost	7.32%
WACC	6.01%
Leverage	126.78%

11. Quality Control: Sonoco Products Company passed 5 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Sonoco

A-Score: 5.9/10

Value: 7.2

Growth: 5.0

Quality: 5.6

Yield: 8.0

Momentum: 1.5

Volatility: 8.3

1-Year Total Return ->

PCA

A-Score: 5.6/10

Value: 3.8

Growth: 4.7

Quality: 6.0

Yield: 6.0

Momentum: 4.5

Volatility: 8.7

1-Year Total Return ->

Greif

A-Score: 5.6/10

Value: 6.9

Growth: 4.2

Quality: 4.2

Yield: 7.0

Momentum: 4.0

Volatility: 7.0

1-Year Total Return ->

Reynolds Consumer Products

A-Score: 5.5/10

Value: 5.0

Growth: 5.0

Quality: 5.5

Yield: 7.0

Momentum: 1.5

Volatility: 9.0

1-Year Total Return ->

Graphic Packaging

A-Score: 5.3/10

Value: 8.0

Growth: 6.4

Quality: 4.2

Yield: 4.0

Momentum: 1.0

Volatility: 8.3

1-Year Total Return ->

WestRock

A-Score: 3.4/10

Value: 4.9

Growth: 2.7

Quality: 2.7

Yield: 2.0

Momentum: 5.0

Volatility: 3.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-1.50%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.01%

Sonoco Products Company - US8354951027

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on SON

1.c. Company Highlights

Less Volatile

Higher Yield

Stable Momentum

Earnings Beats

Fairly Valued

Revenues Miss

Earnings Miss

Revenues Beats

Weak Momentum

Expensive

Average Quality

2. Sonoco's Q3 2025 Earnings: A Strong Performance

Segment Performance

Guidance and Outlook

Valuation

Synergies and Cost Savings

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.57%)

6. Segments

Consumer Packaging

Expected Growth: 7.5%

Industrial Paper Packaging

Expected Growth: 7.8%

All Other

Expected Growth: 7.2%

7. Detailed Products

Paperboard Containers

Plastic Containers

Composite Containers

Closures

Packaging Services

Display and Packaging

Protective Packaging

8. Sonoco Products Company's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Sonoco Products Company passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

41.43$

Current Price

41.43$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA