Sonoco (SON) Buys Inapel to Boost Its Packaging Portfolio
Sonoco Products Company SON announced that it acquired the industry-leading flexible packaging manufacturer, Inapel Embalagens Ltda. This move will help Sonoco grow and expand its sustainable packaging portfolio.
Based in Brazil, Inapel produces rotogravure printing, adhesive and extrusion laminations, specialty coatings, cold sealing, pouching and cylinder engraving. It employs 500 people and has two locations in São Paulo — one in Jundiai and another in Guarulhos.
For the past eight years, the Sonoco Graffo facility in Brazil has been a top manufacturer of high-quality rotogravure printing and advanced lamination. The facility is one of the major converters of foil-based flexible packaging. The addition of Inapel will further help Sonoco’s existing flexible packaging operation.
Rodrigo Alvarez and Monica Saniotto, previous owners of Inapel, will continue to collaborate with Sonoco to develop new 'Better Packaging' solutions. Eduardo Nunes, the managing director of Sonoco Flexibles, will extend his regional leadership duties to the São Paulo facilities with assistance from Alvarez and Saniotto.
Sonoco intends to increase returns on invested capital in the coming years through organic investments in core accretive acquisitions and portfolio rationalization. It reported adjusted earnings per share (EPS) of $1.46 in third-quarter 2023, beating the Zacks Consensus Estimate of $1.26. The figure came above the company’s guidance of $1.25-$1.35. However, the bottom line fell 8.8% from the prior-year quarter, driven by lower volumes.
Sonoco’s net sales were $1,710 million, which missed the Zacks Consensus Estimate of $1,735 million. The top line fell 9.5% year over year on lower volumes.
Price Performance
Sonoco’s shares have lost 4.8% in the past year against the industry’s growth of 0.8%.
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Zacks Rank and Stocks to Consider
Sonoco currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Brady BRC, Applied Industrial Technologies AIT and A. O. Smith Corporation AOS.
BRC currently sports a Zacks Rank #1 (Strong Buy), and AIT and AOS each carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Brady’s 2023 earnings per share is pegged at $4.00. The consensus estimate for 2023 earnings has moved 13% north in the past 60 days and suggests year-over-year growth of 9.9%. The company has a trailing four-quarter average earnings surprise of 7.2%. Shares of BRC have rallied 16.4% in a year.
Applied Industrial has an average trailing four-quarter earnings surprise of 15%. The Zacks Consensus Estimate for AIT’s 2023 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have moved up 4% in the past 60 days. The company’s shares have gained 27.2% in a year.
The Zacks Consensus Estimate for A. O. Smith’s 2023 earnings is pegged at $3.77 per share. The consensus estimate for 2023 earnings has moved 5% north in the past 60 days and suggests year-over-year growth of 20.1%. The company has a trailing four-quarter average earnings surprise of 14%. AOS shares have gained 29.4% in a year.
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Sonoco Products Company (SON) : Free Stock Analysis Report
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