Sonoco Targets Growth With Consumer Focus, European Expansion

Shares of Sonoco Products Co SON have climbed more than 6% over the past five trading sessions.

The company has been focusing on portfolio rationalization and improving its mix, according to Truist Securities.

Analyst Michael Roxland initiated coverage of Sonoco Products with a Buy rating and a price target of $63.

The Five Below Thesis: The company is evaluating the sale of its Thermoformed and Flexible Packaging (TFP) business and diverting its ThermoSafe businesses, Roxland said in the initiation note.

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Sonoco Products has also increased its exposure to consumer-related businesses, "which have better growth and margin dynamics," and reducing its exposure to cyclical segments, he added.

The company has created a new core platform, called Metal Packaging, and is in the process of acquiring Eviosys, "the leading European producer of food cans," the analyst stated.

"This portfolio and mix enhancement could result in a multiple rerate depending on growth and execution," he further wrote.

"Historically, SON has maintained a strong balance sheet and pursued disciplined capital allocation – increasing dividend, M&A, and opportunistic share repurchases," Roxland added.

SON Price Action: Shares of Sonoco Products were down 0.07% to $51.92 at the time of publication on Tuesday.

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