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Avery Dennison (AVY)
:AVY

Avery Dennison (AVY) AI Stock Analysis

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Avery Dennison

(NYSE:AVY)

Rating:71Outperform
Price Target:
$200.00
▲(9.15%Upside)
Avery Dennison's overall stock score reflects strong financial performance and strategic management of economic challenges, with effective operational efficiency and robust cash flows. Technical indicators show moderate bullish momentum, while valuation metrics suggest the stock is fairly valued. The positive outlook from the latest earnings call, despite macroeconomic headwinds, adds to the company's potential for steady growth.
Positive Factors
Growth and Market Position
Avery Dennison is well positioned for the intermediate and longer term despite the challenging outlook due to tariffs.
Guidance and Performance
Research suggests that Avery Dennison remains on track with its quarterly guidance range.
Technological Advancements
Intelligent labels, which are a cornerstone of AVY's growth engine, have been growing significantly and recently gained key customers in underpenetrated markets.
Negative Factors
Financial Performance
The year-over-year decrease in Materials Q1 EBITDA was driven by the negative net impact of pricing and raw material input costs.
Market Challenges
The near-term growth outlook for AVY is uncertain due to macroeconomic challenges like weakening consumer spending, slowing e-commerce channels, and escalating trade tensions with China.
Tariffs and Trade Uncertainty
The deteriorating macro from tariffs and trade war uncertainty weighs heavily on AVY's emerging market exposure and its exposure to apparel, industrial, and logistics end-markets.

Avery Dennison (AVY) vs. SPDR S&P 500 ETF (SPY)

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 Key Performance Indicators (KPIs)

Any
Any
Operating Income by Segment
Operating Income by Segment
Chart InsightsAvery Dennison's Materials Group shows a steady recovery in operating income since early 2023, reflecting strategic pricing and volume management. The Solutions Group has rebounded from a mid-2023 dip, driven by strong growth in high-value solutions and intelligent labels. Despite macroeconomic uncertainties and tariff impacts, both segments are contributing to robust earnings, supported by strategic collaborations and disciplined capital allocation. However, challenges in the apparel segment could temper future growth, as highlighted in the earnings call.
Data provided by:Main Street Data

Avery Dennison Earnings Call Summary

Earnings Call Date:Apr 23, 2025
(Q1-2025)
|
% Change Since: 5.36%|
Next Earnings Date:Jul 22, 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 Financial Statement Overview

Summary
Avery Dennison exhibits a stable financial position with consistent gross profit margins and slight declines in net profit margins. Revenue growth is modest but stable, with strong operational efficiency reflected in EBIT and EBITDA margins. The balance sheet shows manageable leverage, and cash flows are robust, supporting operational and strategic activities.
Income Statement
72
Positive
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.
Balance Sheet
68
Positive
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.
Cash Flow
75
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Mar 2022Mar 2021
Income Statement
Total Revenue8.75B8.76B8.36B9.04B8.41B6.97B
Gross Profit2.52B2.53B2.28B2.40B2.31B1.92B
EBITDA1.41B1.38B1.11B1.37B1.31B1.06B
Net Income698.80M704.90M503.00M757.10M740.10M555.90M
Balance Sheet
Total Assets8.35B8.41B8.21B7.95B7.97B6.10B
Cash, Cash Equivalents and Short-Term Investments195.90M329.10M250.10M167.20M162.70M252.30M
Total Debt3.46B3.15B3.24B3.10B3.10B2.12B
Total Liabilities6.18B6.09B6.08B5.92B6.05B4.60B
Stockholders Equity2.17B2.32B2.13B2.03B1.92B1.50B
Cash Flow
Free Cash Flow591.50M730.00M540.90M662.50M774.70M532.70M
Operating Cash Flow802.70M938.80M826.00M961.00M1.05B751.30M
Investing Cash Flow-214.30M-243.10M-459.00M-332.70M-1.74B-554.20M
Financing Cash Flow-576.00M-576.10M-317.20M-615.20M604.30M-207.70M

Avery Dennison Technical Analysis

Technical Analysis Sentiment
Positive
Last Price183.24
Price Trends
50DMA
176.51
Positive
100DMA
176.67
Positive
200DMA
187.83
Negative
Market Momentum
MACD
0.99
Negative
RSI
61.03
Neutral
STOCH
88.49
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVY, the sentiment is Positive. The current price of 183.24 is above the 20-day moving average (MA) of 177.92, above the 50-day MA of 176.51, and below the 200-day MA of 187.83, indicating a neutral trend. The MACD of 0.99 indicates Negative momentum. The RSI at 61.03 is Neutral, neither overbought nor oversold. The STOCH value of 88.49 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
PKPKG
75
Outperform
$18.20B21.1820.07%2.47%9.47%19.37%
AVAVY
71
Outperform
$14.32B21.0931.95%2.05%3.57%26.92%
SOSON
71
Outperform
$4.59B30.235.54%4.56%-4.58%-61.14%
CCCCK
70
Outperform
$12.56B23.1921.30%0.96%0.90%34.40%
69
Neutral
$16.29B31.168.23%1.36%-9.79%
67
Neutral
$22.20B17.2820.71%5.29%-2.29%24.05%
62
Neutral
$16.85B11.50-7.38%2.96%1.59%-23.36%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AVY
Avery Dennison
183.24
-27.93
-13.23%
BALL
Ball
58.73
-0.36
-0.61%
CCK
Crown Holdings
107.90
35.76
49.57%
PKG
Packaging
202.29
27.08
15.46%
SON
Sonoco Products
46.51
-0.37
-0.79%
AMCR
Amcor
9.63
0.47
5.13%

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
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 02, 2025