Sonoco Products' (SON) industrial business is performing better than expected amid uncertainty around its consumer-segment volumes, UBS Securities said Friday in a report.

The industrial segment is supported by strong demand for uncoated recycled board, high plant utilization, productivity gains, and several growth opportunities, UBS said.

In the consumer division, North American aerosol and adhesives and sealant markets linked to housing and discretionary spending were weaker in Q2, while demand for paper-based composite cans and pet-food packaging remained healthy internationally, the report said.

UBS sees early signs of a solid Q3 as consumer-goods companies increase packaging orders ahead of late-summer and fall demand. Pricing actions, contract pass-throughs, and freight surcharges should help offset inflation, with productivity savings expected to accelerate, the report said.

UBS raised its price target on Sonoco stock to $61 from $58 and maintained its neutral rating.

Price: 58.66, Change: +0.43, Percent Change: +0.74