Hold Rating on Avery Dennison Amid Macroeconomic Challenges and Market Uncertainties

Avery Dennison (AVY) has received a new Hold rating, initiated by Jefferies analyst, Laurence Alexander.

Laurence Alexander has given his Hold rating due to a combination of factors affecting Avery Dennison’s growth prospects. Despite the company’s strong historical performance with GDP+ growth and margin expansion, the current macroeconomic environment presents significant challenges. The uncertainty from tariffs and trade wars, particularly with China, impacts a substantial portion of Avery Dennison’s market exposure, which is heavily reliant on emerging markets and sectors like apparel, industrial, and logistics.
While Avery Dennison has been successful in expanding its high-value categories and maintaining a robust growth trajectory, the near-term outlook is clouded by macroeconomic headwinds. These include weakening consumer spending and disruptions in logistics due to new US customs rules. Although the company’s valuation appears reasonable and its financial stability is supported by strong free cash flow conversion and low leverage, these factors contribute to a cautious outlook, justifying the Hold rating.

In another report released on April 7, UBS also maintained a Hold rating on the stock with a $189.00 price target.