Bear of the Day: Sonoco (SON)

Sonoco SON is a packaging giant serving big clients across food & beverage, household products, automotive, and beyond.  

The global packaging firm's earnings outlook has tanked over the last year and a half as Sonoco struggles against ongoing inflation pressures, weaker volumes, and other headwinds. SON missed our Q3 adjusted earnings estimates by 5% and lowered its outlook once again.

Sonoco’s downbeat earnings revisions picture lands it a Zacks Rank #5 (Strong Sell) right now.

Should Investors Avoid SON Stock Right Now?

Sonoco is a packaging manufacturing powerhouse that works closely with globally recognized brands. The South Carolina-based company’s packaging portfolio includes Rigid Paper, Metal, Industrial Paper, and Industrial & Specialty offerings.

SON sells its array of packaging products to firms across the economy, from Food & Beverage, Household Products, and Beauty & Personal Care to Construction, Automotive, and beyond.

Sonoco has grown its revenue rather steadily over the last 25 years, outside of a few cyclical-based declines. The firm expanded its reach via its acquisition of Europe’s leading food cans, ends and closures manufacturer Eviosys in December 2024.

That said, its Q3 revenue dropped 4% YoY, marking its third-straight quarterly decline against its big Eviosys-boosted 2025. SON posted a GAAP net loss of -$732 million, or -$7.36 per share, “reflecting a non-cash goodwill impairment charge of $(829) million attributable to the Consumer EMEA/APAC and Industrial APAC businesses.”

Meanwhile, its adjusted EPS dropped 13% YoY, and it provided downbeat guidance on October 21. “During the third quarter, our businesses faced a combination of external challenges,” CEO Howard Coker said in prepared remarks.

“Drought conditions across parts of Europe and the U.S. impacted crop yields and pressured food can demand, while the impact of inflation on raw materials, freight, energy, and other operating costs exceeded our expectations.”

Sonoco’s recent downward EPS revisions earn it a Zacks Rank #5 (Strong Sell). On top of that, SON is part of the Containers-Paper and Packaging industry that ranks in the bottom 17% of over 250 Zacks industries. 

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This article originally published on Zacks Investment Research (zacks.com).

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