Education
About Us
Working with TipRanks
Follow Us
Avery Dennison (AVY)
:AVY
Top Page
Avery Dennison
(NYSE:AVY)
Rating:74Outperform
Price Target:
$199.00
▲( 12.08% Upside)
Positive Factors
Earnings Potential
Avery Dennison is in a rare position as a consistent GDP outperformer, driven by a strong management team and growth in high-value categories.
Innovative Growth
Intelligent labels, which are a cornerstone of Avery Dennison's growth engine, have been growing significantly and recently gained key customers in underpenetrated markets.
Market Position
There is limited competitive risk for Avery Dennison in the intelligent labels and radio frequency identification markets.
Negative Factors
Growth Challenges
The near-term growth outlook for Avery Dennison is uncertain due to macroeconomic challenges like weakening consumer spending, slowing e-commerce channels, and escalating trade tensions with China.
Macroeconomic Risks
The deteriorating macro from tariffs and trade war uncertainty weighs heavily on Avery Dennison's emerging market exposure and its exposure to apparel, industrial, and logistics end-markets.
Revenue Impact
Apparel label sales in China for direct U.S. export represent approximately 4% of Avery Dennison's total revenue, which may be impacted by tariffs.
Avery Dennison (AVY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$13.88B
Dividend Yield1.98%
Average Volume (3M)759.17K
Price to Earnings (P/E)20.4
Beta (1Y)0.65
Revenue Growth3.57%
EPS Growth26.92%
CountryUS
Employees35,000
SectorConsumer Cyclical
Sector Strength76
IndustryBusiness Equipment & Supplies
Share Statistics
EPS (TTM)2.30
Shares Outstanding78,175,560
10 Day Avg. Volume638,264
30 Day Avg. Volume759,167
Financial Highlights & Ratios
PEG Ratio-42.71
Price to Book (P/B)6.26
Price to Sales (P/S)0.00
P/FCF Ratio22.76
Enterprise Value/Market Cap1.20
Enterprise Value/Revenue0.48
Enterprise Value/Gross Profit6.64
Enterprise Value/Ebitda2.98
Forecast
1Y Price Target
$198.09Price Target Upside11.57% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
Avery Dennison Business Overview & Revenue Model
Company DescriptionAvery Dennison Corporation manufactures and markets pressure-sensitive materials and products in the United States, Europe, Asia, Latin America, and internationally. The company's Label and Graphic Materials segment offers pressure-sensitive label and packaging materials; and graphics and reflective products under the Fasson, JAC, Avery Dennison, and Mactac brands, as well as durable cast and reflective films. It provides its products to the home and personal care, beer and beverage, durables, pharmaceutical, wine and spirits, and food market segments; architectural, commercial sign, digital printing, and other related market segments; construction, automotive, and fleet transportation market segments, as well as traffic and safety applications; and sign shops, commercial printers, and designers. The company's Retail Branding and Information Solutions segment designs, manufactures, and sells brand embellishments, graphic tickets, tags and labels, and sustainable packaging solutions, as well as offers creative services; radio-frequency identification products; visibility and loss prevention solutions; price ticketing and marking solutions; care, content, and country of origin compliance solutions; and brand protection and security solutions. It serves retailers, brand owners, apparel manufacturers, distributors, and industrial customers. The company's Industrial and Healthcare Materials segment offers tapes; pressure-sensitive adhesive based materials and converted products; medical fasteners; and performance polymers under the Fasson, Avery Dennison, and Yongle brands. It serves automotive, electronics, building and construction, general industrial, personal care, and medical markets. The company was formerly known as Avery International Corporation and changed its name to Avery Dennison Corporation in 1990. Avery Dennison Corporation was founded in 1935 and is headquartered in Glendale, California.
How the Company Makes MoneyAvery Dennison primarily generates revenue through the sale of its diverse product range to various industries worldwide. The company's key revenue streams include pressure-sensitive materials used in labeling and packaging, retail branding and information solutions like apparel tags and labels, and RFID technologies that enhance supply chain visibility and efficiency. Avery Dennison's revenue is bolstered by its strong partnerships with major global brands and retailers, which rely on its innovative and high-quality solutions to enhance product identification, brand visibility, and operational efficiency. The company's focus on sustainable and advanced material technologies also contributes to its competitive edge and financial performance.
Avery Dennison Financial Statement Overview
Summary
Avery Dennison exhibits a solid financial position with stable revenue and profitability metrics. The balance sheet reflects manageable leverage, and cash flows are robust, supporting operational and strategic activities. Continued focus on maintaining profitability and managing debt levels will enhance financial health.Income Statement
Avery Dennison shows a stable financial performance with a consistent gross profit margin and slight decline in net profit margin over the TTM. Revenue growth has been modest but stable. The EBIT and EBITDA margins reflect strong operational efficiency, indicating stable profitability despite economic fluctuations.72
Positive
Balance Sheet
The balance sheet reveals a moderate debt-to-equity ratio, suggesting manageable leverage. However, the company should monitor this to prevent potential over-leveraging. Return on Equity is satisfactory, indicating effective use of shareholders' funds. The equity ratio is reasonable, ensuring sufficient asset coverage.68
Positive
Cash Flow
The cash flow statements indicate strong operating cash flow relative to net income, suggesting good cash conversion. Free cash flow growth has been positive, though slightly volatile. The company maintains a solid free cash flow to net income ratio, indicating efficient cash management.75
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 8.75B | 8.76B | 8.36B | 9.04B | 8.41B | 6.97B | Gross Profit |
| 2.52B | 2.53B | 2.28B | 2.40B | 2.31B | 1.92B | EBIT |
| 1.12B | 1.12B | 963.80M | 1.08B | 1.06B | 856.70M | EBITDA |
| 1.41B | 1.38B | 1.11B | 1.37B | 1.31B | 1.06B | Net Income Common Stockholders |
| 698.80M | 704.90M | 503.00M | 757.10M | 740.10M | 555.90M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 185.70M | 329.10M | 250.10M | 167.20M | 162.70M | 252.30M | Total Assets |
| 8.26B | 8.41B | 8.21B | 7.95B | 7.97B | 6.10B | Total Debt |
| 3.24B | 3.15B | 3.24B | 3.10B | 3.10B | 2.12B | Net Debt |
| 3.05B | 2.82B | 3.03B | 2.93B | 2.94B | 1.86B | Total Liabilities |
| 6.05B | 6.09B | 6.08B | 5.92B | 6.05B | 4.60B | Stockholders Equity |
| 2.20B | 2.32B | 2.13B | 2.03B | 1.92B | 1.50B |
| Cash Flow | Free Cash Flow | ||||
| 591.50M | 730.00M | 540.90M | 662.50M | 774.70M | 532.70M | Operating Cash Flow |
| 802.70M | 938.80M | 826.00M | 961.00M | 1.05B | 751.30M | Investing Cash Flow |
| -214.30M | -243.10M | -459.00M | -332.70M | -1.74B | -554.20M | Financing Cash Flow |
| -576.00M | -576.10M | -317.20M | -615.20M | 604.30M | -207.70M |
Avery Dennison Technical Analysis
Negative
177.55
Price Trends
174.74
Positive
179.77
Negative
193.38
Negative
Market Momentum
2.17
Negative
50.97
Neutral
41.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVY, the sentiment is Negative. The current price of 177.55 is above the 20-day moving average (MA) of 176.42, above the 50-day MA of 174.74, and below the 200-day MA of 193.38, indicating a neutral trend. The MACD of 2.17 indicates Negative momentum. The RSI at 50.97 is Neutral, neither overbought nor oversold. The STOCH value of 41.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AVY.
Avery Dennison Risk Analysis
Avery Dennison disclosed 37 risk factors in its most recent earnings report. Avery Dennison reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Avery Dennison Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $13.88B | 20.43 | 31.95% | 1.98% | 3.57% | 26.92% | |
73 Outperform | $11.29B | 20.85 | 21.30% | 1.04% | 0.90% | 34.40% | |
73 Outperform | $17.16B | 19.96 | 20.07% | 2.62% | 9.47% | 19.37% | |
70 Outperform | $4.45B | 29.32 | 5.54% | 4.61% | -4.58% | -61.14% | |
64 Neutral | $14.36B | 27.46 | 8.23% | 1.54% | -9.79% | ― | |
62 Neutral | $6.84B | 11.22 | 2.83% | 3.93% | 2.65% | -21.93% | |
56 Neutral | $20.66B | 16.08 | 20.71% | 5.59% | -2.29% | 24.05% |
* Consumer Cyclical Sector Average
Performance Comparison
AVY
Avery Dennison
177.55
-43.55
-19.70%
BALL
Ball
51.76
-14.82
-22.26%
CCK
Crown Holdings
97.04
15.66
19.24%
PKG
Packaging
190.70
14.21
8.05%
SON
Sonoco Products
45.69
-11.44
-20.02%
AMCR
Amcor
8.96
-0.39
-4.17%
Avery Dennison Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: 1.56%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant growth in key segments and strategic initiatives, despite facing macroeconomic uncertainties and tariff-related challenges. The company is well-prepared with a robust strategy and strong financials to navigate potential headwinds.Q1-2025 Updates
Positive Updates
Strong Earnings Per Share Growth
Earnings per share were up 4% excluding currency, in line with expectations.
Volume Growth in Both Segments
The company experienced volume growth across both segments, particularly in high-value categories such as graphics, reflective solutions, and industrial tapes.
Solutions Group Performance
The Solutions Group reported strong top-line growth and margin expansion, driven by a robust base business and low single-digit growth in high-value solutions.
Intelligent Labels and Food Industry Collaboration
Intelligent labels grew mid-single digits, driven by strong growth in apparel and food categories, with a strategic collaboration with Kroger underway.
Strong Adjusted EBITDA Margin
The company achieved an adjusted EBITDA margin of 16.4% in the quarter, up 10 basis points compared to the prior year.
Balance Sheet and Capital Allocation
The net debt to adjusted EBITDA ratio was 2.3 at quarter-end, with $331 million returned to shareholders through share repurchases and dividends.
Negative Updates
Macroeconomic Uncertainty and Trade Policy Impacts
Elevated macro uncertainty due to dynamic trade policies and reduced global GDP growth outlooks, with potential direct and indirect impacts from tariffs.
Apparel Segment Challenges
The Embellix platform in the Solutions Group was down mid-single digits due to softer sales for large US performance brands.
Tariff-Related Concerns
Recent tariff changes likely to impact discretionary categories, with less than 10% of material purchases affected but potential indirect demand impact.
Negative Free Cash Flow
Free cash flow was negative $50 million in the quarter, attributed to the timing of rebate and incentive payments.
Apparel Revenue Decline Expected
Apparel growth is expected to decline mid-single digits in Q2, influenced by tariff-related sourcing and pricing strategy challenges.
Company Guidance
In the first quarter of fiscal year 2025, Avery Dennison reported a strong performance, with adjusted earnings per share (EPS) increasing by 4% excluding currency impacts, aligning with expectations. The company witnessed a 2% organic sales growth driven by solid volume gains and strategic price management, despite facing deflation-related price reductions. The Materials Group experienced a 1% organic sales increase, supported by low single-digit volume and mix growth, while the Solutions Group saw a 5% organic sales rise, bolstered by a high single-digit increase in base solutions. Adjusted EBITDA margin was reported at 16.4%, with a strong performance across both segments. The company returned $331 million to shareholders through share repurchases and dividends, and reduced its share count by 2.3 million shares compared to the previous year. Looking ahead to the second quarter, Avery Dennison anticipates EPS to range between $2.30 and $2.50, with continued sales growth in most businesses offset by a mid-single-digit decline in apparel sales. The company is actively managing tariff impacts and macroeconomic uncertainties by implementing pricing surcharges and sourcing adjustments, while maintaining its capital allocation discipline and investing in high-value growth opportunities.Avery Dennison Corporate Events
Executive/Board Changes
Gregory S. Lovins to Resume CFO Role at Avery Dennison
Neutral
Mar 31, 2025
Gregory S. Lovins will resume his role as Avery Dennison’s principal financial officer on April 1, 2025, after a medical leave that began in November 2024. Danny G. Allouche will step down as interim CFO but continue in his other roles. The company’s board approved a base salary of $838,500 for Lovins, maintaining his previous incentive opportunities, as part of their annual executive compensation review.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.