Looking to buy Sonoco on a retracement as quarter results come strong
- Sonoco Products booked estimate-beating earnings in the second quarter.
- The stock has a consensus buy and holds target of $64.80.
- We think the stock will retrace and allow new buyers to enter.
Sonoco Products Company (NYSE:SON) is a good stock for investors looking for quick gains. With returns of 7.95% year to date, Sonoco has defied the bear market. However, it is the latest developments that make a strong bull case for Sonoco stock.
In its Q2 results, Sonoco booked per-share earnings of $1.76. The earnings are higher than $0.93 in the prior year and surpassed estimates of $1.65. The net sales came as expected at $1.91 billion, above $1.38 billion in the prior year.
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In the third quarter, Sonoco expects earnings of between $1.35-$1.45. The EPS is higher than estimates of $1.15. The quarter results helped the stock to blast past a key resistance, setting a new zone for buyers.
Sonoco blasts key resistance after quarter results
The 50-day moving average has joined a support for Sonoco stock for the first time since May. The MACD indicators are bullish too on the stock. With the robust quarter results, Sonoco has now moved above resistance at $58. That sets the price to higher levels and makes $58 our new buy zone.
We believe investors should buy a retracement towards the $58 support. Out of 7 analysts tracked by TipRanks, 6 have a hold rating, and 1 buy with a target of $64.80. The stock could slide after meeting the target, which coincides with resistance. If a retracement follows, investors should buy. Our target is $66 for the stock.
Sonoco Products stock is bullish after the second quarter results. Investors should consider buying on a retracement as the stock nears a resistance zone.
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