Avery Dennison (AVY) AI Stock Analysis

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Avery Dennison

(NYSE:AVY)

Rating:71Outperform

Price Target:

$197.00

▲(12.98%Upside)

Avery Dennison's stock score is driven by solid financial performance and strategic resilience highlighted in the earnings call. The technical analysis suggests neutral momentum, while valuation metrics indicate fair pricing. The recent board appointment adds a positive outlook for long-term growth.

Positive Factors

Earnings Performance

AVY posted a modest beat for 2Q with a solid mix from Vestcom and high value categories in Materials.

Financial Outlook

AVY's stock is poised for multiple recovery and solid upside due to significant FCF and cash conversion and DD EPS growth.

Growth Potential

Significant growth in the Solutions segment with its RFID platform and the Materials segment is expected to drive multiple expansion.

Negative Factors

Revenue Challenges

Revenues were a bit lighter than expected, reflecting challenges in the apparel sector.

Tariff Challenges

The outlook for underlying apparel demand remains murky due to tariff uncertainty, as AVY's customers take a wait-and-see approach fearing inflationary pressure.

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

Market Cap

$13.90B

Dividend Yield2.01%

Average Volume (3M)724.75K

Price to Earnings (P/E)19.9

Beta (1Y)0.61

Revenue Growth1.66%

EPS GrowthN/A

CountryUS

Employees35,000

SectorConsumer Cyclical

Sector Strength64

IndustryBusiness Equipment & Supplies

Share Statistics

EPS (TTM)2.42

Shares Outstanding78,175,560

10 Day Avg. Volume658,809

30 Day Avg. Volume724,753

Financial Highlights & Ratios

PEG Ratio-0.78

Price to Book (P/B)6.31

Price to Sales (P/S)0.00

P/FCF Ratio21.77

Enterprise Value/Market Cap1.22

Enterprise Value/Revenue0.71

Enterprise Value/Gross Profit10.17

Enterprise Value/Ebitda5.73

Forecast

1Y Price Target

$198.33

Price Target Upside13.75% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering7

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

Operating Income by Segment

Operating Income by Segment
Reveals the profitability of each business segment, indicating which areas are most effective at generating profit and where there may be opportunities for improvement.

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:Jul 22, 2025

(Q2-2025)

% Change Since: -2.60%|

Next Earnings Date:Oct 22, 2025

Earnings Call Sentiment Neutral

Avery Dennison demonstrated resilience with solid earnings and strong cash flow amidst a challenging environment. Notable achievements include strong margins in the Materials Group and growth in logistics and Vestcom. However, challenges persist, particularly in the apparel segment and due to trade policy uncertainties. The company remains cautiously optimistic about future performance.

Q2-2025 Updates

Positive Updates

Solid Earnings Performance

Adjusted earnings per share of $2.42, up 5% sequentially and comparable to the prior year, demonstrating resilience in a dynamic environment.

Strong Free Cash Flow

Generated nearly $190 million in adjusted free cash flow during the second quarter.

Materials Group Margins

Materials Group delivered strong productivity and margins on modest volume growth with an adjusted EBITDA margin of 17.8%.

Vestcom Growth

Vestcom sales increased by roughly 10% due to the successful rollout of productivity solutions at CVS Health.

Strong Logistics Growth

Logistics segment saw strong growth compared to prior year and sequentially, maintaining strong market share.

Disciplined Capital Allocation

Returned roughly $500 million to shareholders in the first half of the year and increased the quarterly dividend by 7%.

Negative Updates

Apparel and General Retail Decline

Overall apparel sales were down 6% in the quarter, with orders down high single digits in April, improving slightly by the end of June.

Trade Policy Impact

Uncertainty in trade policy, particularly tariffs, impacted business, notably in the apparel and general retail categories, with an estimated impact of over $0.10 on earnings per share.

European and Asian Market Challenges

Softer growth in Europe and Asia due to strong prior-year performance and lower demand for U.S. exports.

Embelex Platform Decline

Embelex platform saw a decline due to lower sourcing demand and slower orders from prominent U.S. performance brands.

Intelligent Labels Growth Concerns

With more than 70% linked to apparel and general retail categories, near-term growth is impacted by trade policy.

Company Guidance

During Avery Dennison's earnings call for the second quarter of fiscal year 2025, management discussed several key metrics and strategic initiatives. The company reported adjusted earnings per share of $2.42, which represents a 5% sequential increase and is comparable to the prior year. Free cash flow was robust at nearly $190 million, while the adjusted EBITDA margin was strong at 16.6%, up 20 basis points year-over-year. The Materials Group achieved an adjusted EBITDA margin of 17.8%, despite a slight organic sales decline of 1%, attributed to low single-digit deflation-related price reductions. The Solutions Group saw a similar 1% organic sales decline, but achieved a 17.1% adjusted EBITDA margin, up 30 basis points from the previous year. The Intelligent Labels (IL) segment experienced a mid-single-digit sequential sales growth, with food and logistics categories growing mid-teens, although apparel and general retail categories were down mid-single digits. For the third quarter, Avery Dennison expects adjusted earnings per share to be in the range of $2.24 to $2.40, maintaining a cautious outlook due to ongoing trade policy uncertainties and softer apparel volumes, but anticipates a return to earnings growth in the fourth quarter.

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

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

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

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.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.76B	8.36B	9.04B	8.41B	6.97B
Gross Profit	2.53B	2.28B	2.40B	2.31B	1.92B
EBITDA	1.38B	1.11B	1.37B	1.31B	1.06B
Net Income	704.90M	503.00M	757.10M	740.10M	555.90M
Balance Sheet
Total Assets	8.41B	8.21B	7.95B	7.97B	6.10B
Cash, Cash Equivalents and Short-Term Investments	329.10M	250.10M	167.20M	162.70M	252.30M
Total Debt	3.15B	3.24B	3.10B	3.10B	2.12B
Total Liabilities	6.09B	6.08B	5.92B	6.05B	4.60B
Stockholders Equity	2.32B	2.13B	2.03B	1.92B	1.50B
Cash Flow
Free Cash Flow	730.00M	540.90M	662.50M	774.70M	532.70M
Operating Cash Flow	938.80M	826.00M	961.00M	1.05B	751.30M
Investing Cash Flow	-243.10M	-459.00M	-332.70M	-1.74B	-554.20M
Financing Cash Flow	-576.10M	-317.20M	-615.20M	604.30M	-207.70M

Avery Dennison Technical Analysis

Technical Analysis Sentiment

Negative

Last Price174.36

Price Trends

50DMA

178.94

Negative

100DMA

176.36

Negative

200DMA

185.11

Negative

Market Momentum

MACD

-0.25

Positive

RSI

40.74

Neutral

STOCH

51.63

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 174.36 is below the 20-day moving average (MA) of 180.11, below the 50-day MA of 178.94, and below the 200-day MA of 185.11, indicating a bearish trend. The MACD of -0.25 indicates Positive momentum. The RSI at 40.74 is Neutral, neither overbought nor oversold. The STOCH value of 51.63 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 (73)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PKG	77 Outperform	$18.58B	20.61	20.07%	2.42%	8.98%	25.73%
CCK	74 Outperform	$11.99B	21.63	20.60%	1.01%	2.13%	32.36%
Sector *	73 Outperform	€45.74B	40.77	13.92%	7.00%	18.39%	17.85%
AVY	71 Outperform	$13.90B	19.93	31.68%	2.01%	1.66%	―
SON	70 Outperform	$4.77B	30.97	3.98%	4.38%	0.90%	-118.86%
BALL	69 Neutral	$16.37B	31.31	8.23%	1.36%	-9.79%	―
AMCR	67 Neutral	$22.45B	17.48	20.71%	5.27%	-2.29%	24.05%

* Consumer Cyclical Sector Average

Performance Comparison

AVY

Avery Dennison

174.36

-37.48

-17.69%

BALL

Ball

58.68

-3.70

-5.93%

CCK

Crown Holdings

101.48

15.08

17.45%

PKG

Packaging

204.18

11.22

5.81%

SON

Sonoco Products

47.70

-3.21

-6.31%

AMCR

Amcor

9.63

-0.34

-3.41%

Avery Dennison Corporate Events

Executive/Board Changes

Avery Dennison Appoints David Flitman to Board

Positive

Jul 24, 2025

On July 23, 2025, Avery Dennison Corporation appointed David Flitman to its Board of Directors. Flitman, CEO of US Foods Holding Corporation, brings extensive experience in dynamic business environments and the food industry, which is a significant growth area for Avery Dennison. His appointment is expected to help the company create long-term value for stakeholders.

The most recent analyst rating on (AVY) stock is a Hold with a $240.00 price target. To see the full list of analyst forecasts on Avery Dennison stock, see the AVY Stock Forecast page.

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 25, 2025