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Sonoco (SON) Announces Price Hike for Paperboard in Europe

Zacks Equity Research

Sonoco Alcore S.a.r.l., a wholly owned subsidiary of Sonoco Products Company SON, has announced a price hike on all recycled paperboard grades sold in the company’s European region to combat constant and unprecedented rise in raw material costs.

Sonoco Alcore operates 29 tubes and cores plants, and five paperboard mills in Europe, including Sonoco’s largest European uncoated recycled paperboard mill in Italy. Sonoco manufactures paperboard primarily from recycled materials for both internal use and open-market sale.

Paperboard tubes and cores are the elements of the company’s Paper and Industrial Converted Products segment. The segment accounted for approximately 35% of Sonoco’s consolidated net sales in 2016. This segment serves its markets through 183 plants on five continents. Sonoco’s paper operations provide the primary raw material for the company’s fiber-based packaging.

Sonoco Products Company Price


Sonoco Products Company Price | Sonoco Products Company Quote

In order to cope with price adjustments in the European market, this consumer packaging company raised prices of recycled paperboard by $64 (€60) per metric ton. The price hike will be effective with shipments on or after Mar 17.

Sonoco also declared price increases for all paperboard tubes and cores in the U.S. and Canada by a minimum of 10%, to recover from persistent cost inflation, particularly in uncoated recycled paperboard.  The increase is effective with shipments beginning Apr 10.

In the last one year, Sonoco has underperformed the Zacks classified Containers-Paper/Plastic sub-industry with respect to price performance. The stock gained around 13.5%, while the industry rose 17.7% over the same time frame.

Sonoco currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the same space include Brady Corp. BRC, Casella Waste Systems, Inc. CWST and Deere & Company DE. All the three stocks boast a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Brady Corporation has a positive average earnings surprise of 20.84% for the last four quarters. Casella Waste generated a remarkable positive average earnings surprise of 165.21% over the trailing four quarters. Deere & Company has delivered an average positive earnings surprise of 60.50% in the past four quarters.

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