Truist Securities has raised its price target for Sonoco Products Co. to $69 from $54 and reiterated a Buy rating, reflecting renewed confidence in the packaging company's margin roadmap. The stock is trading at $56.53, close to its 52-week high of $58.44, while independent fair-value analysis included with this coverage continues to indicate the shares trade below intrinsic value.
Central to the analyst upgrade is Sonoco's plan to increase adjusted EBITDA to roughly $1.5 billion by the end of 2028. That target represents a climb from an estimated $1.324 billion in 2025 and is supported by a trailing-12-month EBITDA of $1.22 billion, which management and Truist use as a baseline for the multiyear objective.
The company attributes the projected uplift primarily to margin-improvement initiatives in the range of $150 million to $200 million, levels that the company says already factor in ongoing inflationary pressures. Executives break the expected benefit down into three categories:
- Structural transformation - includes roughly $60 million of remaining synergies tied to the Eviosys acquisition within Consumer Packaging, plus simplification of support functions.
- Commercial excellence - involves new product introductions and customer expansion, gains in market share, and adoption of value-based pricing approaches.
- Operational improvements - spans supply chain upgrades, footprint optimization, productivity gains and additional synergies derived from ongoing programs.
When combined, the initiatives are expected to yield about 200 basis points of EBITDA margin expansion versus the current run rate. Sonoco's growth model also assumes modest volume gains in the low single digits annually through 2028, rather than relying on outsized demand recovery.
At a recent investor presentation, the company reiterated these three-year financial targets, specifying an adjusted EBITDA goal of about $1.5 billion by 2028 and a targeted expansion of adjusted EBITDA margins by approximately 200 basis points. Management also set a cash generation aim, forecasting cumulative cash flow from operations around $2.5 billion over the same period.
On the sustainability front, Sonoco has begun receiving renewable power under a Virtual Power Purchase Agreement with ENGIE North America tied to the Big Sampson Wind Project in Texas. The agreement will deliver roughly 140 megawatts of electricity annually to Sonoco, covering a significant portion of its U.S. electricity usage, and carries a 15-year term.
Together, the margin program, modest volume assumptions and the renewable energy arrangement form the pillars of the company’s near-term strategy: boost profitability, maintain disciplined capital allocation and reduce carbon intensity in U.S. operations. Investors looking for deeper financial schedules, scenario analysis and additional strategic detail can consult the more comprehensive paid research report that covers Sonoco and a broad set of U.S. listed companies.
Truist’s move to raise the price target reflects a positive view on Sonoco’s ability to deliver on these specific operational and commercial initiatives, while the company’s stated cash-flow and sustainability targets provide additional context for its medium-term capital allocation plans.