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Sonoco (SON) Inks Deal With AMP Robotics, Boosts Paper Can Recycling

Sonoco's (SON) alliance with AMP Robotics supports its focus on growing sustainable packaging solutions.

This story originally appeared on Zacks

Sonoco Products Company SON has joined forces with AMP Robotics to recycle the spiral wound paper canister with steel bottom produced by it and other manufacturers.

Recycled steel usage has a 45% lesser environmental impact when compared to producing an equal amount from a virgin material, which, in turn, reduces the need for mining virgin iron ore. Also, reprocessing the paper container with steel bottom through steel or other streams has more than 40% lower environmental impact than landfilling. Any material recycling with an AMP Cortex intelligent robotics system can now efficiently classify Sonoco’s paper can to the desired stream.

AMP Robotics is a pioneer in AI, robotics and infrastructure for the waste and recycling industry. The company is advancing the global recycling infrastructure by applying AI and automation to enhance the recycling rates and economically recover recyclables, which are used as raw materials for the global supply chain.

As a leading recycler, Sonoco helps deliver end-of-life solutions across its consumer and industrial packaging platforms. In fact, the collaboration supports Sonoco’s focus on growing sustainable packaging solutions.

Sonoco anticipates demand in most of its consumer and industrial businesses to remain healthy in the near term. It projects the third-quarter 2021 adjusted earnings per share to lie between 87 cents and 93 cents compared with the earnings of 86 cents reported in third-quarter 2020.

For 2021, management estimates adjusted earnings per share guidance at $3.50-$3.60. In 2020, the company reported adjusted earnings per share of $3.41. The upbeat guidance is based on the assumption that the global business activity will continue improving on the government stimulus measures and global vaccination efforts.

Sonoco’s Consumer Packaging segment will continue to gain traction from the pandemic-driven demand for certain consumer products like food and household products. Its industrial-served markets will gain from the historically-high backlogs for uncoated recycled paperboard in the United States and Canada, and strong demand for global tubes, cores and cones. The company’s temperature-assured business will benefit from the rising sales of critical products packaging for pharmaceutical transport, including the flu vaccines.

Meanwhile, Sonoco’s Consumer Packaging and Industrial Paper Packaging segments are likely to witness a negative price/cost in the third quarter due to rising recycled fiber and resin prices as well as higher freight costs.

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Price Performance

Sonoco’s shares have gained 11.9%, so far this year, compared with the industry's rally of 15.9%.

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Zacks Rank & Stocks to Consider

Sonoco currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the Industrial Products sector include Encore Wire Corporation WIRE, Terex Corporation TEX and Lincoln Electric Holdings, Inc. LECO. While Encore Wire and Terex sport a Zacks Rank #1 (Strong Buy), Lincoln Electric carries a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Encore Wire has a projected earnings growth rate of 332.6% for fiscal 2021. So far this year, the company’s shares have gained 45%.

Terex has an estimated earnings growth rate of 2,207.6% for 2021. The company’s shares have gained 47.4% so far this year.

Lincoln Electric has an expected earnings growth rate of 45.1% for 2021. The stock has appreciated 22%, year to date.

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Terex Corporation (TEX): Free Stock Analysis Report


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