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On Thursday, Raymond (NSE:RYMD) James analyst Matt Roberts adjusted the price target for Sonoco Products (NYSE:SON) stock, reducing it to $54.00 from the previous $58.00 while retaining an Outperform rating. Currently trading at $46.38, near its 52-week low of $44.35, the company stands out with its impressive 42-year streak of consecutive dividend increases and a current yield of 4.48%. According to InvestingPro data, analysts have set price targets ranging from $50 to $71, suggesting potential upside. Roberts provided insights into the company’s recent performance and future expectations, noting that despite a challenging quarter with moving parts due to mergers and acquisitions, a simpler portfolio should emerge for Sonoco.
The analyst expressed disappointment with Eviosys, a part of Sonoco, for underperforming in 2024 against already modest expectations, and the delayed realization of synergies, which appeared to be a timing issue. Additionally, the announcement that the strategic review of Thermosafe would be completed by the end of 2025, rather than the earlier expectation of an early first-half sale, is seen as prolonging market uncertainty. This has been reflected in Sonoco’s share price, which fell by 4% on the day of the announcement.
Despite these setbacks, Raymond James noted that Sonoco’s guidance for 2025 was above their prior expectations. The firm pointed out that while there may be some skepticism regarding the company’s strong volume outlook of 2.5-3%, there could be potential offsets from what is considered a conservative price/cost outlook. InvestingPro analysis reveals the company maintains a "GOOD" overall financial health score, with particularly strong marks in profitability. Two analysts have recently revised their earnings estimates upward for the upcoming period, adding credibility to the positive outlook. As a result, Raymond James has slightly increased their 2025 EBITDA/EPS estimates for Sonoco to $1,374 million and $6.06 respectively, with an anticipated margin expansion of approximately one percentage point.
The analyst concluded by reiterating the Outperform rating for Sonoco stock, citing an attractive valuation for investors willing to wait for what is expected to be a more normal year in 2026. With an EPS forecast of $6.29 for 2025 and revenue growth expected this year, the company’s fundamentals appear solid. Discover more insights about Sonoco and 1,400+ other stocks through comprehensive Pro Research Reports available on InvestingPro, offering deep-dive analysis and actionable intelligence for smarter investing decisions. The firm’s 2026 EPS estimate for Sonoco is $6.25, assuming slightly stronger Consumer volume growth, the build-out of the Paper Can segment, and the realization of Eviosys synergies, all contributing to the company’s deleveraging narrative.
In other recent news, Sonoco Products Company reported fourth-quarter revenue of $1.36 billion, which did not meet the analyst consensus estimate of $1.59 billion. The company’s adjusted earnings per share were $1.17, slightly below the expected $1.19. Sonoco has provided guidance for the full year 2025, forecasting adjusted EPS between $6.00 and $6.25, which is below the Wall Street consensus of $6.40. The company anticipates cash flow from operations to be in the range of $750-$850 million and adjusted EBITDA between $1.3-$1.4 billion for 2025.
Additionally, Sonoco completed the acquisition of Eviosys, a European food can manufacturer, in December. The company expects this acquisition to contribute to approximately 20% growth in adjusted net income in 2025 compared to 2024. Despite meeting earnings expectations, the revenue shortfall and cautious outlook for 2025 have raised concerns among investors. Analysts and investors may seek further insights into Sonoco’s growth strategies and the integration of Eviosys in the upcoming earnings call.
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