Jefferies has begun coverage of Sonoco (SON, Financial) with a Buy rating, setting a price target of $62. The firm highlights that Sonoco is close to completing a significant portfolio restructuring that started in 2020. According to Jefferies, the company's previous large-scale divestitures have obscured notable improvements in its profit margins and free cash flow, resulting in a suppressed stock valuation.
As this restructuring phase nears its end, Jefferies conducted a sum-of-the-parts analysis and concluded that the market is undervaluing Sonoco's restructured portfolio. The firm anticipates a potential upside of 43% in Sonoco's stock price, indicating a considerably positive outlook for the company's future performance. The analysis underscores Sonoco's potential for growth post-transformation, making it an attractive investment opportunity according to Jefferies.
