Bank of America Securities analyst George Staphos has maintained their bullish stance on AVY stock, giving a Buy rating on August 27.
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George Staphos has given his Buy rating due to a combination of factors, including the potential for Avery Dennison to improve its fundamental trends and achieve upside potential relative to the price objective. The recent acquisition of Meridian’s flooring adhesives business, although small, presents interesting opportunities. The business is expected to generate significant synergies due to Avery’s expertise in adhesives, potentially lowering the post-synergy EBITDA multiple and providing incremental growth in high-value markets.
Despite the challenges in timing mergers and acquisitions, and concerns about sluggish trends in repair and remodeling and broader construction, Avery’s management anticipates mid-single digit synergies that could enhance profitability. The acquisition is expected to be EVA-positive by the third year, with Meridian’s resilient flooring and repair and remodeling exposure offering differentiation and growth opportunities. These factors contribute to the Buy rating, as they align with Avery’s broader adhesives and materials experience.
According to TipRanks, Staphos is a 4-star analyst with an average return of 4.6% and a 52.49% success rate. Staphos covers the Consumer Cyclical sector, focusing on stocks such as International Paper Co, Greif Class A, and Packaging.