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Sonoco (SON) Gains But Lags Market: What You Should Know

·3 min read

In the latest trading session, Sonoco (SON) closed at $64.71, marking a +1.11% move from the previous day. This change lagged the S&P 500's 1.53% gain on the day. Meanwhile, the Dow gained 1.19%, and the Nasdaq, a tech-heavy index, added 0.14%.

Heading into today, shares of the packaging maker had gained 0.39% over the past month, outpacing the Industrial Products sector's loss of 1.42% and the S&P 500's loss of 3.1% in that time.

Investors will be hoping for strength from Sonoco as it approaches its next earnings release. On that day, Sonoco is projected to report earnings of $1.43 per share, which would represent year-over-year growth of 57.14%. Meanwhile, our latest consensus estimate is calling for revenue of $1.92 billion, up 35.82% from the prior-year quarter.

SON's full-year Zacks Consensus Estimates are calling for earnings of $6.33 per share and revenue of $7.46 billion. These results would represent year-over-year changes of +78.31% and +33.47%, respectively.

Any recent changes to analyst estimates for Sonoco should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Sonoco is currently a Zacks Rank #1 (Strong Buy).

Digging into valuation, Sonoco currently has a Forward P/E ratio of 10.11. This valuation marks a discount compared to its industry's average Forward P/E of 12.55.

Meanwhile, SON's PEG ratio is currently 2.02. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Containers - Paper and Packaging was holding an average PEG ratio of 2.07 at yesterday's closing price.

The Containers - Paper and Packaging industry is part of the Industrial Products sector. This group has a Zacks Industry Rank of 80, putting it in the top 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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