Sonoco Products (SON) Stock Forecast & Price Target

Sonoco Products has demonstrated consistent growth with a 4% year-over-year increase in consumer volumes, driven by strong demand in U.S. metal cans, which experienced significant double-digit growth. The company also achieved an expansion of segment EBITDA margins by approximately 350 basis points year-over-year in Q2, highlighting robust price/cost dynamics and productivity gains, particularly in its Industrial Packaging segment. Additionally, Sonoco's position as the largest producer of Uncoated Recycled Boxboard (URB) in North America, combined with recent industry consolidation, is expected to enhance its pricing power and overall returns.

Sonoco Products Company is facing a negative outlook primarily due to its lowered EPS guidance for 2025, which has been adjusted from a range of $6.00-$6.20 to a more conservative $6.00, despite maintaining its EBITDA outlook. The company is exposed to various downside risks, including fluctuating input costs, moderating demand in key packaging segments, and heightened competition, which could further strain its financial performance. Additionally, the potential challenges related to the integration of Eviosys and the uncertainties in international markets contribute to concerns over Sonoco's future capital return trends.