Avery Dennison (AVY) AI Stock Analysis

• Market Cap: $15.10B
• Dividend Yield: 2.04%
• Average Volume (3M): 585.93K
• Price to Earnings (P/E): 22.2
• Beta (1Y): 0.57
• Revenue Growth: 1.03%
• EPS Growth: 5.52%
• Country: US
• Employees: 35,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Business Equipment & Supplies
• EPS (TTM): 2.45
• Shares Outstanding: 77,295,395
• 10 Day Avg. Volume: 484,921
• 30 Day Avg. Volume: 585,935
• PEG Ratio: 25.52
• Price to Book (P/B): 6.28
• Price to Sales (P/S): 1.59
• P/FCF Ratio: 19.76
• Enterprise Value/Market Cap: 1.24
• Enterprise Value/Revenue: 2.12
• Enterprise Value/Gross Profit: 7.36
• Enterprise Value/Ebitda: 14.39
• 1Y Price Target: $218.80
• Price Target Upside: 11.11% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 10.18
• Revenue Forecast (FY): $9.26B

• Rating: 70 Outperform
• Price Target: $212.00 ▲(7.66% Upside)
• Action: Reiterated Date: 02/05/26
• Date: Action: Reiterated 02/05/26

The score is driven primarily by resilient financial fundamentals (steady margins and strong, repeatable cash generation) and constructive technical momentum. Offsetting factors are leverage-related balance-sheet risk, modest valuation support (P/E ~21 with a ~1.9% yield), and earnings-call commentary pointing to limited near-term organic growth and tariff-related demand uncertainty despite stable EPS/FCF guidance.

Positive Factors

Strong free cash flow generation

Consistent operating and free cash flow (roughly $0.75B–$1.05B OCF; $0.53B–$0.77B FCF historically) supports reinvestment, buybacks and dividends. High cash conversion provides durable funding for strategic projects and cushions performance through cyclical retail cycles.

Resilient margins and profitability

Stable gross margins in the high-20s and EBITDA margins in the mid-teens indicate structural pricing power and cost control across product portfolios. Sustained margins underpin cash generation and make investment returns less sensitive to near-term sales variability.

Shift to higher-value products and intelligent labels

Growing mix toward high-value solutions (45% of sales) and intelligent-label momentum in food, logistics and industrial creates higher-margin, sticky revenue streams. This structural mix shift reduces reliance on lower-margin apparel and supports multi-year growth opportunities.

Negative Factors

Material leverage and debt-heavy capital structure

Elevated gross debt relative to equity and net debt to adjusted EBITDA around 2.4x constrains flexibility for large M&A or aggressive capital programs. Higher leverage increases interest expense sensitivity and reduces resilience if cash conversion weakens or macro conditions stress demand.

Weak organic revenue growth outlook

Limited organic growth implies modest operating-leverage upside and continued dependence on currency tailwinds and bolt-on deals to lift sales. Prolonged subpar organic expansion can cap long-term margin expansion and returns despite productivity programs.

Elevated inventories and working-capital pressure

A shift into higher-value, more working-capital intensive categories and inventory elevation ties up cash and increases cycle-time risk. That raises FCF volatility, can pressure margins if markdowns occur, and reduces short-term liquidity flexibility versus peers.

Avery Dennison Business Overview & Revenue Model

Company Description

Avery 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 Money

Avery Dennison generates revenue primarily through the sale of its labeling and packaging materials. The key revenue streams include the Label and Graphic Materials segment, which contributes a significant portion of the company's sales through products such as pressure-sensitive labels and specialty films. The Retail Branding and Information Solutions segment also plays a crucial role in revenue generation by providing brand identification products and services to retailers and manufacturers. The company benefits from long-term partnerships with major consumer brands, enabling it to maintain a steady demand for its products. Additionally, Avery Dennison invests in innovative technologies, such as RFID and smart labeling solutions, which cater to evolving market needs and drive further revenue growth.

Avery Dennison Financial Statement Overview

Summary

Supported by solid profitability and consistently strong operating/free cash flow, but tempered by uneven growth, net income below 2022 levels, and a debt-heavy balance sheet (plus some inconsistency in the latest leverage/return fields).

Income Statement

Revenue has been broadly stable with a modest step-up from 2023 to 2024 and slight growth again in 2025, but the longer trend shows uneven demand (including a decline in 2023). Profitability is solid and fairly consistent: gross margin has held in the high‑20% range and EBITDA margin sits in the mid‑teens, indicating good pricing and cost control. The main weakness is earnings momentum—net income is below the 2022 level and margins have not meaningfully expanded, suggesting limited operating leverage in the most recent years.

Balance Sheet

Leverage is meaningful: total debt remains high (roughly $3.1B–$3.7B) relative to equity (~$2.0B–$2.3B in most years), implying a debt-heavy capital structure and less balance-sheet flexibility if conditions soften. Total assets have grown over time, which supports scale, and returns on equity were strong in 2021–2024, pointing to efficient capital use. A key weakness is data inconsistency in 2025 (debt-to-equity and return on equity are shown as 0.0 despite sizable debt and equity), which reduces confidence in the latest-year leverage and return signals.

Cash Flow

Cash generation is a strength: operating cash flow has been consistently robust (roughly $0.75B–$1.05B) and free cash flow remains strong (about $0.53B–$0.77B), supporting reinvestment and shareholder returns. Free cash flow has generally tracked earnings well, with free cash flow running at roughly two‑thirds to four‑fifths of net income across the period, indicating decent cash conversion. The weakness is volatility in year-to-year free cash flow growth (notably declines in 2022 and 2023), implying working-capital or spending swings rather than a smooth upward trajectory.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	8.86B	8.76B	8.36B	9.04B	8.41B
Gross Profit	2.55B	2.53B	2.27B	2.40B	2.31B
EBITDA	1.34B	1.38B	1.11B	1.37B	1.31B
Net Income	688.00M	704.90M	503.00M	757.10M	740.10M
Balance Sheet
Total Assets	8.80B	8.40B	8.21B	7.95B	7.97B
Cash, Cash Equivalents and Short-Term Investments	202.80M	367.20M	215.00M	167.20M	162.70M
Total Debt	3.73B	3.15B	3.24B	3.10B	3.10B
Total Liabilities	6.56B	6.09B	6.08B	5.92B	6.05B
Stockholders Equity	2.24B	2.31B	2.13B	2.03B	1.92B
Cash Flow
Free Cash Flow	712.40M	730.00M	540.90M	662.50M	774.70M
Operating Cash Flow	881.40M	938.80M	826.00M	961.00M	1.05B
Investing Cash Flow	-596.00M	-243.10M	-459.00M	-332.70M	-1.74B
Financing Cash Flow	-414.90M	-576.10M	-317.20M	-615.20M	604.30M

Avery Dennison Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 196.92
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 196.92 is above the 20-day moving average (MA) of 190.72, above the 50-day MA of 186.28, and above the 200-day MA of 175.18, indicating a bullish trend. The MACD of 2.93 indicates Negative momentum. The RSI at 65.29 is Neutral, neither overbought nor oversold. The STOCH value of 76.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AVY.

Avery Dennison Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PKG	76 Outperform	$21.51B	27.85	―	2.42%	7.23%	-3.88%
CCK	71 Outperform	$13.16B	17.88	25.61%	1.01%	2.94%	893.70%
SON	71 Outperform	$5.68B	14.48	20.01%	4.33%	8.31%	-99.39%
AVY	70 Outperform	$15.10B	22.24	30.21%	2.04%	1.03%	5.52%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
SLGN	60 Neutral	$5.10B	17.86	13.53%	1.97%	11.10%	6.54%
GPK	58 Neutral	$3.86B	8.84	13.99%	2.91%	-3.93%	-27.37%