Sonoco (SON) Soars 5.0%: Is Further Upside Left in the Stock?

Sonoco (SON) shares rallied 5% to $45.74 on notable volume, rebounding from a 2.6% loss over the past four weeks, ahead of its Q2 2025 earnings report on July 23. The packaging maker delivered strong Q1 2025 results, with adjusted EPS up 23% to $1.38 and net sales up 31% to $1.71 billion, partly due to acquisitions. While Q2 consensus estimates project continued growth with EPS of $1.46 (+14.1% YoY) and revenues of $1.9 billion (+17% YoY), the article highlights that the consensus EPS estimate has remained unchanged for 30 days, suggesting potential limitations for sustained upside without positive revisions.

Analysis

Sonoco (SON) experienced a significant 5% share price increase to $45.74 on high trading volume, reversing a 2.6% decline from the previous four weeks. This rally precedes its Q2 2025 earnings announcement scheduled for July 23. The company's fundamentals appear robust, as evidenced by its Q1 2025 performance where adjusted EPS grew 23% year-over-year to $1.38 and net sales rose 31% to $1.71 billion, bolstered by the Eviosys acquisition. Looking ahead, consensus estimates for Q2 project continued strength, with expected EPS of $1.46 (+14.1% YoY) and revenue of $1.9 billion (+17% YoY). However, a key point of caution is the lack of upward movement in consensus EPS estimates over the past 30 days. The absence of positive earnings revisions can often act as a headwind for sustained stock price appreciation. In contrast, industry peer Graphic Packaging (GPK) faces a challenging outlook, with a projected 25% YoY decline in EPS and a 'Strong Sell' rating, positioning Sonoco as a relatively stronger performer within the packaging sector.

Key Decisions for Investors

• While the recent 5% rally and strong growth forecasts are positive signals, investors should monitor for any upward revisions to consensus earnings estimates ahead of the July 23 report, as the current stagnation may limit further upside potential.
• Consider the recent rally in the context of the stock's 'Hold' rating and the lack of new catalysts beyond the earnings date announcement; the current valuation may already reflect the positive Q1 results and Q2 forecasts.
• Given the weak earnings outlook for competitor GPK, Sonoco appears to be a more stable holding within the paper and packaging sector, but caution is warranted until the company provides updated guidance or estimate revisions confirm the positive momentum.