Sonoco Products (SON) Stock Forecast & Price Target

Sonoco Products has demonstrated robust performance with a 4% year-over-year increase in consumer volumes, notably driven by a significant demand for U.S. metal cans. The company has also shown strong productivity, achieving an expansion of approximately 350 basis points in segment EBITDA margins year-over-year, primarily led by its Industrial Packaging segment. Furthermore, Sonoco's dominant position as the largest North American Uncoated Recycled Boxboard (URB) producer, coupled with recent industry consolidation, enhances its pricing power and potential for improved returns.

Sonoco Products has maintained its EBITDA guidance at approximately $1.3 to $1.4 billion but has lowered its earnings per share (EPS) forecast for 2025 to about $6.00, indicating potential difficulties in achieving prior performance levels. Key downside risks include lower-than-expected product pricing, increasing input costs, and weakening demand in critical sectors such as metal containers and rigid packaging, which could further pressure financial performance. Additionally, challenges related to new plant start-ups, heightened competition, and any unsuccessful integration of acquisitions pose significant risks that may hinder effective capital allocation and overall profitability.