SON
Sonoco Products Company
$57.42
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 30.7% below fair value
You pay
$57.42
Bear
$66.26
Fair
$82.82
Bull
$99.39
Bear
$66.26
+15.4%
$6.05 × 12x P/E
Fair
$82.82
+44.2%
$6.05 × 15x P/E
Bull
$99.39
+73.1%
$6.05 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
9.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $59.00 from 21 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $82.82 per share.
Warnings
The company's reported profits differ from official accounting profits by 52%. Check what costs are being left out of the adjusted number.
Dividend-based valuation: $43.61 (below our primary estimate by 52%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $59.00 (from 21 analysts). Our estimate is 54% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples