Is SON a good stock to buy? We came across a bullish thesis on Sonoco Products Company on r/StockPickNews by EaseQuiet529. In this article, we will summarize the bulls’ thesis on SON. Sonoco Products Company’s share was trading at $50.48 as of May 5th. SON’s trailing and forward P/E were 8.12 and 8.89 respectively according to Yahoo Finance.
Sonoco Products Company, together with its subsidiaries, designs, develops, manufactures, and sells various engineered and sustainable packaging products in the United States and internationally. SON is being viewed as a compelling investment opportunity, with analysts highlighting a potential 38% upside driven by its ongoing transformation into a more focused, higher-margin packaging company.
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The core of the thesis lies in its strategic portfolio simplification, where the business has been streamlined from 20 segments down to just two—Consumer Packaging and Industrial Paper Packaging.
This shift has meaningfully repositioned the company, with consumer packaging now accounting for approximately 67% of sales versus 42% in 2020, reducing exposure to cyclical industrial demand while increasing stability through recurring consumer-oriented revenues. Complementing this transition, divestitures of non-core assets have enabled debt reduction and sharpened focus on higher-return operations.
Margin expansion is another key driver, with management targeting $1.5 billion in adjusted EBITDA by 2028 alongside a 200-basis-point improvement through efficiency gains and AI integration. The company’s pricing power, supported by its leadership in uncoated recycled board production, has allowed it to pass through cost inflation, reinforcing profitability.
Despite recent share price appreciation, valuation remains attractive relative to peers, supported by a strong dividend profile, including 43 consecutive years of dividend growth and a yield near 3.8%, appealing to income-focused investors.
Additionally, Sonoco’s expected operating cash flow of $700–$800 million in 2026 underpins a balanced capital allocation strategy, including dividends, reinvestment, and deleveraging toward a sub-2.5x leverage target. Overall, the combination of strategic repositioning, margin expansion, and strong cash generation supports a favorable risk/reward profile.
Previously, we covered a bullish thesis on Avery Dennison Corporation (AVY) by Serhio MaxDividends in May 2025, which highlighted the company’s strong operational performance, consistent dividend growth, and expansion into intelligent labeling solutions. AVY’s stock price has depreciated by approximately 11.95% since our coverage. EaseQuiet529 shares a similar view but emphasizes on Sonoco’s portfolio transformation, margin expansion, and undervaluation within packaging.
Sonoco Products Company is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held SON at the end of the fourth quarter which was 34 in the previous quarter. While we acknowledge the risk and potential of SON as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SON and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
