Value
7.5/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 9.3 |
| P/S | 9.8 |
| EV/EBITDA | 7.0 |
| Fwd P/E | 9.4 |
| Analyst target | 4.0 |
- ▸Forward P/E: 9.2x
- ▸Attractively valued
SON · Why this verdict
Why Sonoco Products (SON) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Sonoco Products offers compelling valuation at a forward price-to-earnings of 7.9 times with a price-to-earnings growth ratio of 0.33, and strong price momentum with rising volume accumulation, but inconsistent earnings delivery and a 52% international revenue exposure create meaningful execution risk.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Sonoco trades at a forward price-to-earnings of 7.9 times and a price-to-earnings growth ratio of 0.33, which the value analysis flags as attractively valued, with analyst consensus implying roughly 21% upside from the current $50.35 price. Valuation breakdown | The stock closes at least half of the gap to consensus price targets, reaching $58 or higher within 12 months, as the valuation discount compresses toward the peer median. | Tripped↓Deteriorating |
| CounterA weak Piotroski financial strength score of 3 out of 9 and revenue declining roughly 2% year-over-year suggest that cheap valuation may be warranted rather than a buying opportunity. | ||
Both on-balance volume and the moving average convergence-divergence indicator are positive, confirming volume-backed buying interest, and the stock is trading above its 200-day moving average, a technical condition consistent with institutional accumulation. Momentum breakdown | On-balance volume continues rising and the stock holds above its 200-day moving average for at least 6 of the next 12 months, signaling sustained demand. | ↑Improving |
| CounterWith the asymmetry ratio at only 0.59 (upside 5.2% vs. downside 8.8%), the stock has limited room to run before hitting the analyst target, making momentum a weak catalyst for new buyers. | ||
Of the last four reported quarters, Sonoco missed analyst earnings estimates in 2 quarters and came in exactly at consensus in 1 more, producing an essentially flat average earnings surprise of -0.05% — a weak track record for a value candidate. Earnings | Earnings surprise turns consistently positive, with the company beating consensus by more than 3% in at least 3 of the next 4 quarters as cost efficiencies from restructuring materialize. | ↑Improving |
| CounterThe two misses (August and October 2025 at -5.65% and -0.31%) and flat trend suggest management is struggling to predict its own results, which is common in packaging businesses facing input-cost volatility. | ||
International operations account for roughly 52% of Sonoco's business, creating significant exposure to foreign currency fluctuations and geographic concentration risk that the bear case identifies as the primary structural concern. Bear case | Revenue from international segments grows at least 2% in constant-currency terms over the next year, demonstrating resilience to currency headwinds and geographic volatility. | ↑Improving |
| CounterA strengthening US dollar or regional slowdowns in key international markets could disproportionately reduce reported earnings, adding volatility to an already uncertain earnings trajectory. | ||
Sonoco trades at a forward price-to-earnings of 7.9 times and a price-to-earnings growth ratio of 0.33, which the value analysis flags as attractively valued, with analyst consensus implying roughly 21% upside from the current $50.35 price.
Tripped↓DeterioratingValuation breakdown
- Expectation
- The stock closes at least half of the gap to consensus price targets, reaching $58 or higher within 12 months, as the valuation discount compresses toward the peer median.
CounterA weak Piotroski financial strength score of 3 out of 9 and revenue declining roughly 2% year-over-year suggest that cheap valuation may be warranted rather than a buying opportunity.
Both on-balance volume and the moving average convergence-divergence indicator are positive, confirming volume-backed buying interest, and the stock is trading above its 200-day moving average, a technical condition consistent with institutional accumulation.
↑ImprovingMomentum breakdown
- Expectation
- On-balance volume continues rising and the stock holds above its 200-day moving average for at least 6 of the next 12 months, signaling sustained demand.
CounterWith the asymmetry ratio at only 0.59 (upside 5.2% vs. downside 8.8%), the stock has limited room to run before hitting the analyst target, making momentum a weak catalyst for new buyers.
Of the last four reported quarters, Sonoco missed analyst earnings estimates in 2 quarters and came in exactly at consensus in 1 more, producing an essentially flat average earnings surprise of -0.05% — a weak track record for a value candidate.
↑ImprovingEarnings
- Expectation
- Earnings surprise turns consistently positive, with the company beating consensus by more than 3% in at least 3 of the next 4 quarters as cost efficiencies from restructuring materialize.
CounterThe two misses (August and October 2025 at -5.65% and -0.31%) and flat trend suggest management is struggling to predict its own results, which is common in packaging businesses facing input-cost volatility.
International operations account for roughly 52% of Sonoco's business, creating significant exposure to foreign currency fluctuations and geographic concentration risk that the bear case identifies as the primary structural concern.
↑ImprovingBear case
- Expectation
- Revenue from international segments grows at least 2% in constant-currency terms over the next year, demonstrating resilience to currency headwinds and geographic volatility.
CounterA strengthening US dollar or regional slowdowns in key international markets could disproportionately reduce reported earnings, adding volatility to an already uncertain earnings trajectory.
Per-dimension breakdown
Quality
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.3 |
| ROA | 2.7 |
| Gross margin | 0.2 |
| Op margin | 4.0 |
| Net margin | 4.2 |
| Current ratio | 4.0 |
| FCF quality | 6.7 |
| Moat | 3.6 |
| Piotroski F | 3.3 |
- ▸No competitive moat
- ▸Weak Piotroski F-Score: 3/9
Growth
1.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.2 |
| EPS growth | 0.0 |
- ▸Declining revenue: -1%
Momentum
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 7.1 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 3.9 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.8 |
| Analyst rating | 6.9 |
| Price target | 6.2 |
- ▸Light analyst coverage (9.0) — signal dampened
Insider
7.5/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.5 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Insider buying (low materiality) — $340,168 (0.006% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.4 |
| quality rank | 7.6 |
| growth rank | 0.5 |
- ▸Attractive P/E vs peers
Technical
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.7 |
| 52w position | 9.9 |
Risk (lower is worse)
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.1 |
| days to cover | 1.8 |
| volatility | 3.9 |
| put call | 10.0 |
| implied vol | 5.7 |
| beta | 10.0 |
| debt equity | 4.4 |
| news risk | 5.0 |
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 3.4 |
| dividend safety | 7.5 |
| news activity | 8.0 |
- ▸Dividend aristocrat: 3.8% yield
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (6)
- MOMENTUM:7.1>=5.5
- INSIDER:OK
- NEWS_BOOST:ANALYST:0.60
- EARNINGS_PROXIMITY:96d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.7=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.65
Upside
-5.9%
Downside
9.1%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 54, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's -0.7=NEGATIVE outcome against Value at 7.5 and asymmetric R:R of -0.65.
The strongest dimensions are Value at 7.5, Insider at 7.5, and Momentum at 7.1; the weakest are Growth at 1.1, Technical at 3.5, and Quality at 3.9. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.65 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Deep Value Low PegTripped
Trip ifForward price-to-earnings expands above 12x without revenue growth returning above 0%, indicating the valuation gap has closed before business fundamentals justified it.
- P2Price Momentum Accumulation
Trip ifOn-balance volume falls below its 90-day average for more than 8 consecutive weeks, signaling distribution overtaking accumulation.
- P3Earnings Delivery Inconsistency
Trip ifEarnings surprise falls below -3% in at least 2 of the next 4 quarters, confirming persistent execution weakness.
- P4International Concentration Risk
Trip ifReported international revenue declines by more than 5% year-over-year in any single reported quarter.