DA Davidson on Friday downgraded Sonoco Products CompanySON from Neutral to Underperform after the paper and forest product company reported fourth quarter earnings. DA Davidson raised their price target from $40 to $44.
Sonoco issued earnings of $0.66 per share compared to $0.58 from the fourth quarter of last year. However concerns over the rising US dollar have caused analysts at DA Davidson to cut their 2015 earnings estimate for Sonoco from $2.80 to $2.69.
Steven Chercover, an analyst at DA Davidson calls 2015 a year of digestion for Sonoco saying, "We suspect that Sonoco's near term focus will be on the integration of the $383 million purchase of Weidenhammer, which was the second largest acquisition in Sonoco's 100+ year history." However the purchase took the company's debt to 45.1 percent, greatly increasing the risk of the company.
Sonoco Products Company has traded at $46.96.
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