Sonoco Products (NYSE:SON), a maker of packaging an industrial products, announced a $50 per ton price increase on all grades of its uncoated recycled paperboard (URB).
The price bump, driven by the necessity "to offset increased input costs," goes into effect on February 1st, 2024.
Following up on the announcement, analysts at Truist view it as a positive for some of the company's peers, namely Graphic Packaging (NYSE:GPK) and WestRock (NYSE:WRK).
"Given the URB announcement and similar inflationary pressures, we’d be surprised if price increases for other boxboard grades such as coated recycled paperboard (CRB) were not also announced. This announcement follows the announcements by containerboard producers last week to increase linerboard prices $70-75/ton and medium prices $100-110/ton increase effective January 1 mainly due to rising costs, but we believe also due to slowly improving demand, lower supply, and declining inventories," analysts commented.
They reiterate a Buy rating and $31 Price Target on GPK, and a Hold rating at $40 Price Target on WRK.