Sonoco Products (SON) Stock Forecast & Price Target

Sonoco Products has demonstrated strong performance with consumer volumes increasing approximately 4% year-over-year, driven primarily by robust demand in the US metal cans segment, which saw substantial growth. The company's financial health is further underscored by a significant expansion in segment EBITDA margins, which increased by around 350 basis points year-over-year, largely attributed to strong price/cost dynamics and productivity improvements, particularly in the Industrial Packaging sector. Additionally, Sonoco's position as the leading North American producer of uncoated recycled board, along with recent industry consolidation, has enhanced its pricing power and overall returns.

Sonoco Products faces a negative outlook primarily due to its lowered EPS guidance for 2025, which has been revised from a range of $6.00-$6.20 down to $6.00, despite maintaining its EBITDA forecast of approximately $1.3-1.4 billion. The company is also contending with several downside risks, including rising input costs, declining demand trends in key markets like metal containers and rigid packaging, and increasing competition in the packaging industry. Additionally, the integration of acquisitions, such as Eviosys, along with the additional costs associated with new plant startups, presents further challenges that could adversely affect financial performance.