UPDATE: Goldman Sachs Downgrades Sonoco Products to Sell

Goldman Sachs lowers its rating on Sonoco Products SON to Sell from Neutral on headwinds to EPS and downside to consensus estimates. Price target is cut $1 to $31. Goldman Sachs says, "While SON offers a 3.5% dividend yield and has established a long-term track record of above-cost-of-capital returns, we rate SON shares Sell, relative to our coverage, as SON screens expensive relative to peers (7% premium on 2012 P/E) and we see 5% downside to 2012 consensus EPS. We see three drivers negatively impacting 2012 earnings: (1) continued soft US packaged food demand given elevated inflation at the retail level, (2) secular volume declines for tubes and cores, and (3) pressure on SON's margins from higher recycled paper (OCC) prices." SON closed at $34.36 a share on Monday.