Sonoco Products (SON) Stock Forecast & Price Target

Sonoco Products has demonstrated a robust performance with a 4% year-over-year increase in consumer volumes, particularly noting a substantial rise in US metal can demand driven by effective commercial execution. Furthermore, the company has experienced a significant expansion in segment EBITDA margins of approximately 350 basis points year-over-year, particularly within its Industrial Packaging sector, showcasing strong price/cost dynamics and productivity improvements. Additionally, Sonoco's status as the largest North American URB producer positions the company favorably within a consolidating industry, enhancing its pricing power and potential returns.

Sonoco Products has revised its 2025 earnings per share guidance downward, indicating potential challenges in achieving previously set financial targets despite maintaining an EBITDA outlook of $1.3-1.4 billion. The company faces multiple downside risks, including increasing input costs, greater expenses related to new plant start-ups, and moderating demand trends in key packaging sectors, which may adversely impact future profitability. Moreover, increasing competition and potential challenges with international market exposure further exacerbate concerns regarding Sonoco's ability to deliver robust capital returns moving forward.