SONOCO PRODUCTS CO (SON): what the price assumes

In the published model solve dated 2026-Q2, anchored at $58.45, SONOCO PRODUCTS CO (SON) is priced for -4.5% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-11.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/SON

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7.3pp (computed at the 7% minimum rate; the CAPM rate 5.9% sits below it).

Reconcile: at the x-ray's 9.3% required return this reads ~10.8%/yr; the models below use their own rates.

How unusual the bet is: within-range

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.3%); the inversion above states its own rate.

Per-Model Detail (n=13)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Sonoco has spent two years swapping businesses: the Eviosys metal-can acquisition came in, the thermoformed-flexibles and ThermoSafe units went out as discontinued operations [FY2025 10-K, accession 0000091767-26-000008], and the result is a global consumer and industrial packaging company operating across 37 countries priced at $55.91 (July 10, 2026), roughly half of what most of the valuation lenses would defend.
• The biggest specific risk is the balance sheet meeting a soft cycle: $4.5 billion of net debt against interest coverage of 4.6 times, with the 10-K stating plainly that "cash flow may need to be used to service our indebtedness, and, therefore, may not be available for use in our business" [FY2025 10-K, accession 0000091767-26-000008].
• Watch whether management holds even the low end of the $5.80 to $6.20 adjusted EPS guidance it steered toward in April after freight and fuel inflation of $8 to $10 million hit the Q2 outlook; the stock fell 16.6% on that print.

Bull Case

A trailing income statement is a photograph, and Sonoco spent the entire exposure moving. The reported numbers blend a full year of the Eviosys metal-packaging acquisition coming in with the thermoformed-and-flexibles business (sold for approximately $1.8 billion) and ThermoSafe (sold for $656 million gross at closing) going out, with the departed units "presented as discontinued operations in the Consolidated Statements of Income" [FY2025 10-K, accession 0000091767-26-000008]. Any model that capitalizes the trailing twelve months is valuing the blur, not the business that exists now. What exists now is a more focused packaging company that used the divestiture proceeds to cut net debt by $2.7 billion in a single year.

The business underneath the portfolio surgery has real footing. Sonoco operates in 37 countries "serving some of the world's best-known brands" [FY2025 10-K, accession 0000091767-26-000008], and the anchor is consumer packaging, which the 10-K describes as "a segment that has historically demonstrated strong performance across economic cycles" [FY2025 10-K, accession 0000091767-26-000008]. Cans of food and household staples do not track GDP the way industrial cores do, and that segment now carries the Eviosys platform: management reported $40 million of synergies captured by late 2025 with $100 million of annual savings projected for 2026. The company has also set a public marker of $1.5 billion of EBITDA by 2028 as the transformation completes.

Meanwhile the price embeds outright decline: at today's level the market is paying a multiple of operating income consistent with operating profit shrinking around 4 to 5% a year for the next five years. A company with a cycle-resistant consumer anchor, a freshly captured synergy pipeline, and a deleveraging balance sheet does not have to grow much to beat a bar set below zero. That asymmetry, the gap between what the models can see in the trailing data and what the assembled portfolio is positioned to do, is the bull case.

Bear Case

Line up the valuation approaches and notice which one disagrees. The equity-based lenses, earnings power, peer multiples, book-value-plus-profitability, all land well above today's price; on most of them the stock trades at roughly half of what they would defend. The one dissent is the lens that prices the whole enterprise: on enterprise value against EBITDA relative to peers, the price sits about 28% ABOVE what that method supports. The difference between those two readings is $4.5 billion of net debt. Equity screens see a cheap stock; the enterprise view sees a fully priced business wearing a leveraged capital structure. When a company carries interest coverage of 4.6 times, the enterprise view is the more honest one, because the debt gets paid before the equity does.

The company says as much in its own risk language: "cash flow may need to be used to service our indebtedness, and, therefore, may not be available for use in our business", and the TFP and ThermoSafe proceeds went to debt paydown "as required under the terms of such term loan facilities" [FY2025 10-K, accession 0000091767-26-000008]. Required is the load-bearing word: the deleveraging was covenant-driven, not discretionary. The transformation also carries execution risk the filing names directly, warning that growth initiatives could cost "significantly more or take significantly longer to effectuate than we expect" [FY2025 10-K, accession 0000091767-26-000008], and the Section 232 tariffs raise steel and aluminum input costs for the U.S. metal packaging operations [FY2025 10-K, accession 0000091767-26-000008].

The first quarter showed what happens when the cycle leans on this structure. Sales of $1.68 billion fell 2% and missed consensus, adjusted EBITDA declined double digits, and management steered full-year adjusted EPS to the low end of the $5.80 to $6.20 range on inflation and soft demand. The market took 16.6% off the stock in response. The industrial side sells into markets the 10-K describes as "influenced by the overall rate of economic activity" and "principally driven by supply and demand" [FY2025 10-K, accession 0000091767-26-000008], which is packaging-speak for cyclical with no pricing shelter. A price that implies declining operating income is not obviously wrong here; it is the market charging for four turns of leverage against earnings that just proved they can fall.

Valuation

Today's $55.91 works out to about 17 times company-wide operating income, which at a 7% cost of capital implies operating profit declining roughly 4.7% per year over a five-year horizon. That is the bet: the market is paying a price it would earn back even if Sonoco's operating income shrank steadily from here. Against the company's own recent record the near-term pace is within what it has delivered; the stretch is in how long the decline would have to persist, not the rate. The company earns a 13.6% trailing operating margin on the continuing portfolio, with the departed thermoformed-flexibles business carved out of every comparison period as discontinued operations [FY2025 10-K, accession 0000091767-26-000008].

The triangulating methods mostly agree, which is itself the signal. Earnings-power arithmetic, peer multiples, and book-value-plus-profitability all land at roughly double today's price, and even the forward-looking cash-flow view sits about a third above it. The lone dissenter is the enterprise-value comparison against packaging peers, which reads the price as about 28% above what it defends once the $4.5 billion of net debt is counted into the purchase. That split describes the situation precisely: the equity is priced for decline, and the debt is the reason the discount exists.

Solvency is therefore the section that matters. Net debt of $4.5 billion runs about 4.4 times trailing operating income on the EDGAR quarterly basis (the pricing multiple above reads a separate record basis; the two measures differ by roughly a fifth), interest coverage is 4.6 times, the company is not burning cash, and the share count has been essentially flat, drifting up 0.3% a year over four years. The 10-K notes divestiture proceeds were applied to the term loans as required [FY2025 10-K, accession 0000091767-26-000008], and management reports net debt down $2.7 billion during 2025. The price does not need growth to work; it needs the consumer segment's cycle resistance to hold the operating line flat while the debt keeps amortizing.

Catalysts

The April 22 first-quarter print reset the year. Net sales of $1.68 billion fell 2% and came in below the $1.71 billion consensus, GAAP EPS was $0.68 against adjusted EPS of $1.20, and management pointed the full year toward the low end of its $5.80 to $6.20 adjusted EPS range, citing inflationary pressure and softer demand, with an incremental $8 to $10 million of freight and fuel cost expected in the second quarter and recovery assumed in the back half. The stock fell 16.6% on the report, which makes the second-quarter print the pivotal near-term event: it either validates the back-half-recovery assumption or forces a second cut.

The transformation scorecard runs alongside. Eviosys synergy capture was reported at $40 million by late 2025 with $100 million of annual savings targeted for 2026, and management has published a $1.5 billion EBITDA target for 2028. The ThermoSafe sale closed November 3, 2025 at $656 million gross (up to $725 million with earnout), completing the divestiture program, and 2025 net debt reduction totaled $2.7 billion. Progress on leverage from here comes from earnings and free cash flow rather than asset sales, which raises the stakes on the demand recovery management is counting on.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• CF (CF INDUSTRIES HOLDINGS, INC.)
• FY2025 10-K: …impact of realized derivatives, and costs incurred due to the idling of the Yazoo City plant. See "AN Segment-Yazoo City Incident," above, for additional information. Gross Margin . Gross margin in our Other segment increased by $4 million, or 2%, to $205 million in 2025 from $201 million in 2024, and our gross…
• FY2025 10-K: …to the cost of natural gas used to produce ammonia, and (iii) higher realized natural gas costs, including the impact of realized derivatives, for our North American operations. Gross Margin . Gross margin in our AN segment was $79 million in both 2025 and 2024, and our gross margin percentage was 18.8% in 2025…
• MOS (MOSAIC CO)
• FY2025 10-K: …Fertilizantes segment's production of crop nutrient dry concentrates and animal feed ingredients remained materially unchanged from the prior year period at 3.5 million tonnes. For the years ended December 31, 2025 and 2024 our phosphate operating rate was 78%. Our Brazilian phosphate rock production increased to 4.2…
• FY2025 10-K: …ownership of MWSPC for shares of Saudi Arabian Mining Company (" Ma'aden "). Our equity in the net earnings or losses relating to MWSPC were recognized on a one-quarter lag in our Consolidated Statements of Earnings. • Our Potash business segment owns and operates potash mines and production facilities in Canada and…
• BAK (BAK)
• FY2025 20-F: …that are part of our Brazil Segment generally conducts export sales to buyers in Asia and Africa through the international spot market. Our customer base in these markets consists primarily of trading houses and distributors. The domestic price for PVC resins is based on the import parity of PVC imported by…
• FY2025 20-F: …consumer and industry trends and preferences, and regulatory changes. · Our revenue from certain of our customers may be significant, and the credit risks associated with customers could adversely affect the results of our operations and increase expected credit losses. · Higher raw materials costs would increase our…
• ESI (Element Solutions Inc)
• FY2025 10-K: …We also face competition from many smaller companies that specialize in particular segments of the markets in which we compete. 7 The specific competitive environment of each of our segments is described below: Electronics Our Electronics segment provides a broad line of proprietary chemical technologies, materials…
• FY2025 10-K: …primarily due to continued AI and data center investment driving demand for metallization solutions. • Semiconductor Solutions : net sales increased 14% on a reported basis and 13% on an organic basis. Foreign exchange had a positive impact of 1% on reported net sales. The increase in organic net sales was primarily…
• IP (INTERNATIONAL PAPER COMPANY)
• FY2025 10-K: …the same products based on a variety of factors (e.g. level of contractual volume, geographical location, etc.). Management has concluded that the prices negotiated with each individual customer are representative of the stand-alone selling price of the product. 75 Table of Contents NOTE 4 EARNINGS PER SHARE…
• FY2025 10-K: …products companies. We also compete, in some instances, with companies in other industries and against substitutes for wood-fiber products. Many factors influence the Company's competitive position, including price, cost, product quality and services. You can find more information about the impact of these factors on…
• SSRM (SSR MINING INC.)
• FY2025 10-K: …its properties. Existing or future competition in the mining industry could materially adversely affect the Company's prospects for mineral exploration and success in the future. Increased operating and capital costs could affect the Company's profitability. Costs at any particular mining location are subject to…
• FY2025 10-K: …mineable ore deposits, and there is no assurance that any anticipated or estimated level of recovery of mineral reserves will be realized or that any identified mineral deposit will ever qualify as a commercially mineable (or viable) orebody that can be legally and economically exploited. Once a site with…
• RGLD (Royal Gold, Inc)
• FY2025 10-K: …to capital than we have. Key competitive factors in the stream and royalty acquisition and financing business include the ability to identify and evaluate potential opportunities, transaction structure and consideration, and access to capital. Regulation Operators of the mines that are subject to our stream and…
• FY2025 10-K: …may not be able to compete effectively against them. Changes to tax rules, accounting policies or the treatment of stream interests by debt ratings agencies could make streams or royalties less attractive to operators or render us less able to compete with other stream and royalty companies that are organized in…
• CSW (CSW INDUSTRIALS, INC.)
• FY2025 10-K: …used in operations that did 36 Table of Contents not recur. Operating margin of 15.8% for the year ended March 31, 2025 decreased as compared to 16.3% for the year ended March 31, 2024. This decrease was primarily due to the aforementioned gain on sale of property that did not recur, partially offset by the effective…
• FY2025 10-K: 6.9% for the year ended March 31, 2025 increased as compared to 26.5% for the year ended March 31, 2024. This increase was primarily due to pricing actions and a prior year trademark impairment that did not recur, which offset the impact from the aforementioned increases in freight and acquisition related expenses,…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.