Sonoco's Initiatives Following Investor Day

Goldman Sachs has published a research report on Sonoco Products Company SON after the company's investor day where the company provided near- and long-term targets and goals, along with strategic initiatives. In the report, Goldman writes "(1) SON provided its initial 2011 EPS guidance range of $2.52-$2.62. At the mid-point of the range ($2.57), 2011 EPS will grow 11% yoy, primarily driven by 3%-5% volume growth across the consumer and industrial packaging segments. Our 2011 EPS estimate of $2.55 is unchanged. (2) SON expects its 4Q2010 EPS will be at the lower end of its initial $0.57-$0.61 guidance range owing to higher recycled paper (OCC) costs. We modestly lower our 4Q2010 and 2010 EPS estimates to $0.57 and $2.31 from $0.61 and $2.35, respectively, to reflect higher OCC prices than we previously modeled. (3) SON announced plans to buyback 2 mn shares (2% of float) by end of 1Q2011 – in line with our estimates. (4) SON reiterated its 2014 financial targets, which include revenues of $5.5-$6.0 bn and EBIT margins of 11% that imply 2014 EPS of $3.86. (5) SON expects to grow its consumer and industrial packaging businesses via acquisitions; SON expects acquisitions will add $0.5 bn-$1.0 bn to sales by 2014. (6) SON expects to grow its consumer volumes via new product launches, conversions of metal cans to composite cans, and market share wins." Goldman Sachs maintains its Neutral rating and $36 price target. Sonoco Products Company closed Friday at $33.16.