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Sonoco (SON) Arm to Increase Paperboard Prices in Europe

Zacks Equity Research

Sonoco Alcore S.a.r.l., a wholly owned subsidiary of Sonoco Products Company SON, announced that it will raise the prices of all recycled paperboard grades sold in the company’s European region.

The consumer packaging company has decided to raise the prices, owing to the constant rise in raw material costs as a result of increased demand. China`s National Sword initiative, new capacity within the paper packaging sector and improving European economy stemmed the inflated demand.

Thus, Sonoco decided to pass these increases to its customers. The company raised the prices of recycled paperboard by €50 per ton ($57 / ton). The price hike will be effective with shipments on or after Jul 17.

Sonoco Products Company Price


Sonoco Products Company Price | Sonoco Products Company Quote

In Mar 2017, Sonoco raised the prices of recycled paperboard by $64 (€60) per metric ton due to the same reason. Increase in costs can adversely affect the company’s business and financial results, while the ability to pass them on to customers through price hike will improve productivity.

Sonoco is disappointed with the results from its single corrugated medium machine due to the lackluster market conditions. In addition, the slowdown in manufacturing in the U.S. and emerging markets, along with a stronger U.S. dollar, is expected to thwart its industrial businesses.

These factors affected Sonoco’s price performance over the past one year. The stock gained around 0.9%, underperforming the Zacks classified Containers-Paper/Plastic sub-industry that gained 15.9% over the same time frame.

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

Some better-ranked stocks in the same space include Apogee Enterprises, Inc. APOG, Casella Waste Systems, Inc. CWST and Deere & Company DE, each boasting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Apogee has an average positive earnings surprise of 3.42% in the trailing four quarters. Casella Waste delivered a remarkable average positive earnings surprise of 187.78% in the trailing four quarters. Deere & Company delivered an average positive earnings surprise of 70.41% in the last four quarters.

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