Sonoco Products Company (SON - Free Report) announced that it is implementing a price hike of a minimum of 8% for all paperboard tubes and cores and also a $50 per ton price increase for all grades of uncoated recycled paperboard (URB) in the United States and Canada. The price hike will be effective on shipments beginning May 13.
The price hike in both categories comes after a hiatus of nearly two years. Per the company, the hike for paperboard tubes and cores was necessary to recoup rising costs for the primary raw material — recycled paperboard. In URB, Sonoco has been witnessing inflated input costs for starch and other papermaking chemicals, labor and fringes, repair costs and repair materials, and recycled fiber costs, most recently.
The cost to operate and maintain paper machines is increasing day by day. Recently, Sonoco decided to close two paper machines in the United States and Canada as the cost to maintain them was much higher than the return generated from these assets. The company has, meanwhile, embarked on a Project Horizon, per which it will make an $83 million investment. The majority of it will be spent on transforming its Hartsville, SC, corrugated medium machine into a new paper machine that will be the world’s largest and lowest-cost URB producer.
The new machine will have an annual production capacity of approximately 180,000 tons and produce a wide range of high-value paper grades to cater to Sonoco’s industrial and consumer converted products businesses and external trade customers. After the full ramp-up of production, the investment is projected to lead to around $24 million in annual cost savings starting 2023. Sonoco also expects to garner additional savings from supply-chain optimization, increased consumption of low-cost mixed paper and environmental and power consumption savings.
Sonoco has been deemed an “essential supplier” during the COVID-19 pandemic. The company has been focusing on maintaining continuity of supply to meet customers’ critical needs.
For 2020, Sonoco anticipates earnings per share between $3.60 and $3.70. The midpoint of the guidance range reflects year-over-year growth of 3%. Despite the impact of the coronavirus outbreak, earnings are likely to be aided by benefits from the Conitex, Corenso and TEQ acquisitions.
Sonoco along with Amcor Plc. (AMCR - Free Report) falls under the Zacks Containers - Paper and Packaging industry. The company’s shares have lost 20.5% in the past year compared with the industry’s decline of 43.3%.
Currently, Sonoco carries a Zacks Rank #3 (Hold).
Stocks to Consider
Better-ranked stocks in the Industrial Products sector are Sharps Compliance Corp. and Silgan Holdings Inc. (SLGN - Free Report) . While Sharps Compliance sports a Zacks Rank #1 (Strong Buy), Silgan carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Sharps Compliance has an estimated earnings growth rate of 800% for 2020. In a year, the company’s shares have gained 113%.
Silgan Holdings has an estimated earnings growth rate of 6.5% for 2020. In a year, the company’s shares have gained 7%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Sonoco Products Company (SON - Free Report) announced that it is implementing a price hike of a minimum of 8% for all paperboard tubes and cores and also a $50 per ton price increase for all grades of uncoated recycled paperboard (URB) in the United States and Canada. The price hike will be effective on shipments beginning May 13.
The price hike in both categories comes after a hiatus of nearly two years. Per the company, the hike for paperboard tubes and cores was necessary to recoup rising costs for the primary raw material — recycled paperboard. In URB, Sonoco has been witnessing inflated input costs for starch and other papermaking chemicals, labor and fringes, repair costs and repair materials, and recycled fiber costs, most recently.
The cost to operate and maintain paper machines is increasing day by day. Recently, Sonoco decided to close two paper machines in the United States and Canada as the cost to maintain them was much higher than the return generated from these assets. The company has, meanwhile, embarked on a Project Horizon, per which it will make an $83 million investment. The majority of it will be spent on transforming its Hartsville, SC, corrugated medium machine into a new paper machine that will be the world’s largest and lowest-cost URB producer.
The new machine will have an annual production capacity of approximately 180,000 tons and produce a wide range of high-value paper grades to cater to Sonoco’s industrial and consumer converted products businesses and external trade customers. After the full ramp-up of production, the investment is projected to lead to around $24 million in annual cost savings starting 2023. Sonoco also expects to garner additional savings from supply-chain optimization, increased consumption of low-cost mixed paper and environmental and power consumption savings.
Sonoco has been deemed an “essential supplier” during the COVID-19 pandemic. The company has been focusing on maintaining continuity of supply to meet customers’ critical needs.
For 2020, Sonoco anticipates earnings per share between $3.60 and $3.70. The midpoint of the guidance range reflects year-over-year growth of 3%. Despite the impact of the coronavirus outbreak, earnings are likely to be aided by benefits from the Conitex, Corenso and TEQ acquisitions.
Sonoco along with Amcor Plc. (AMCR - Free Report) falls under the Zacks Containers - Paper and Packaging industry. The company’s shares have lost 20.5% in the past year compared with the industry’s decline of 43.3%.
Currently, Sonoco carries a Zacks Rank #3 (Hold).
Stocks to Consider
Better-ranked stocks in the Industrial Products sector are Sharps Compliance Corp. and Silgan Holdings Inc. (SLGN - Free Report) . While Sharps Compliance sports a Zacks Rank #1 (Strong Buy), Silgan carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Sharps Compliance has an estimated earnings growth rate of 800% for 2020. In a year, the company’s shares have gained 113%.
Silgan Holdings has an estimated earnings growth rate of 6.5% for 2020. In a year, the company’s shares have gained 7%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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