Sonoco Products (SON) Stock Forecast & Price Target

Sonoco Products has demonstrated consistent growth, with consumer volumes increasing approximately 4% year-over-year, mainly driven by robust demand for US metal cans and effective commercial execution. The company reported a significant expansion in segment EBITDA margins, increasing around 350 basis points year-over-year, particularly within the Industrial Packaging segment, bolstered by favorable price and productivity dynamics. Furthermore, Sonoco's strong position as the largest North American Uncoated Recycled Boxboard (URB) producer, along with benefits from recent industry consolidation, enhances its pricing power and returns, contributing to a positive outlook for the stock.

Sonoco Products has maintained its EBITDA guidance of $1.3-1.4 billion but has lowered its 2025 EPS forecast to approximately $6.00, reflecting potential underlying challenges. Key downside risks include lower-than-expected pricing, rising input costs, and moderating demand trends across its packaging segments, as well as intense competition and operational uncertainties related to new plant start-ups and the integration of Eviosys. The company’s efforts in disciplined capital allocation and portfolio rationalization may not sufficiently mitigate these risks, leading to a cautious outlook on its financial stability moving forward.