Sonoco Products "Worst of inflation behind them, but fairly valued;..."

Research evidence excerpt

Sonoco Products "Worst of inflation behind them, but fairly valued;..."

Global Research

24 July 2026ab

Sonoco Products Equities

United StatesWorst of inflation behind them, but fairly valued;

Maintain Neutral Paper Products

12-month rating Neutral

12m price target US$61.00Our View

Prior : US$58.00

We maintain our Neutral rating. The Industrial business is performing better than

expected, with strong URB fundamentals, high utilization, productivity gains and a Price (24 Jul 2026) US$56.32

number of attractive growth opportunities. However, these positives are largely RIC: SON.N BBG: SON US

balanced by continued uncertainty around Consumer segment volumes. We would like

to see a more sustained volume recovery to help us become more constructive on Trading data and key metrics

earnings growth. For now, we continue to see a balanced risk/reward profile. 52-wk range US$57.63-39.27

Market cap. US$5.62b

Industrial is the key earnings driver while Consumer remains the swing factor Shares o/s 99.8m (COM)

Volume/mix was better in Industrial (-0.2% y/y), with SON reporting strong backlogs and Free float 99%

share gains while entering new markets like saturating URB. The company is guiding to Avg. daily volume ('000) 421

LSD vol growth y/y in 2H, supported by URB, reels, share gains and growth in new end Avg. daily value (m) US$21.6

markets. Conversely, the Consumer segment (65-70% of annual sales) vol/mix was Common s/h equity (12/26E) US$3.68b

down 2% in 2Q. While paper can and pet food demand remained healthy in P/BV (12/26E) 1.5x

international markets, NA aerosol and adhesives/sealants markets that are linked to Net debt to EBITDA (12/26E) 2.7x

housing and discretionary spending were weaker. Management is not assuming a

meaningful rebound in these end markets in 2H.