Sonoco (SON) Gains From Pricing Actions Amid Low Volumes

Core Insights - Sonoco Products Company is experiencing growth in its consumer packaging business despite volume declines due to lower consumer spending, with shares gaining 4.7% over the past year compared to the industry's 15.5% growth [1] Strategic Actions Aid Margins - The consumer packaging segment is benefiting from the Metal Packaging acquisition and aggressive pricing strategies to combat inflation [3] - Strong recovery in pricing and cost management, along with the Ball Metalpack acquisition, is expected to positively impact 2024 results [3][4] Focus on Growth & Innovation - Sonoco aims to achieve an annual EBITDA of $1 billion by 2026 through increased investment in core businesses and capital allocation [5] - The company plans to enhance returns on invested capital via organic investments and strategic acquisitions [5][6] Strategic Acquisitions Drive Performance - The acquisition of Ball Metalpack for $1.35 billion enhances Sonoco's sustainable packaging portfolio and is expected to yield tax benefits of $180 million [7][8] - The acquisition of Skjern for $88 million expands production capacity and positions Sonoco in the growing sustainable paper market in Europe [9] Near-Term Concerns - Declining volumes due to reduced consumer purchases may negatively impact margins, alongside pressures from raw material and energy costs [10] - Supply chain disruptions and increased SG&A expenses are anticipated to affect performance in 2024 [10]