UPDATE: JP Morgan Downgrades Sonoco to Underweight on Mix Challenges

JP Morgan downgraded Sonoco Products Company

from Neutral to Underweight and lowered the price target from $34.00 to $32.00. JP Morgan commented, "We downgrade SON shares to Underweight from Neutral as we see belowaverage upside potential (~5%) versus peers (~10%) on our lowered estimates. Fundamentally, our primary area of caution versus guidance is mix-related as we think SON's emerging market and plastics strategies could take some time to generate cost of capital returns, potentially diluting near-term results. In the meantime, while improved housing or food end markets could lead to higher relative volumes for SON, offsets could come from still sluggish paper and composite can volumes, capping relative upside in our view. A solid 4% dividend yield likely limits absolute downside, making our UW more of a relative call." Sonoco closed at $30.38 on Tuesday.