Sonoco Products (SON) Stock Forecast & Price Target

Sonoco Products has demonstrated robust consumer demand, with volumes increasing approximately 4% year-over-year, notably supported by strong performance in US metal cans, which experienced double-digit growth. The company has also reported impressive productivity metrics in the second quarter, with segment EBITDA margins expanding by about 350 basis points year-over-year, particularly in its Industrial Packaging segment. Additionally, Sonoco’s position as the largest North American URB producer and the benefits arising from recent industry consolidation have enhanced its pricing power and potential for improved returns, bolstering the overall outlook for the company.

Sonoco Products has revised its 2025 EPS guidance downward from ~$6.00-6.20 to ~$6.00, indicating potential challenges in maintaining profitability amidst various operational pressures. The company faces several downside risks, including increasing input costs, greater expenses associated with new plant start-ups, and slowing demand in key sectors such as metal containers and paperboard. Additionally, competitive pressures and risks associated with international market exposure further complicate the company's financial outlook, raising concerns about capital allocation and overall performance.