Avery Dennison (AVY) AI Stock Analysis

• Market Cap: $13.63B
• Dividend Yield: 2.08%
• Average Volume (3M): 622.03K
• Price to Earnings (P/E): 19.6
• Beta (1Y): 0.66
• Revenue Growth: 1.66%
• EPS Growth: 14.38%
• Country: US
• Employees: 35,000
• Sector: Consumer Cyclical
• Sector Strength: 73
• Industry: Business Equipment & Supplies
• EPS (TTM): 2.42
• Shares Outstanding: 77,981,590
• 10 Day Avg. Volume: 643,609
• 30 Day Avg. Volume: 622,029
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.25
• Enterprise Value/Revenue: 1.95
• Enterprise Value/Gross Profit: 6.83
• Enterprise Value/Ebitda: 12.08
• 1Y Price Target: $198.43
• Price Target Upside: 15.20% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 70 Outperform
• Price Target: $197.00 ▲(14.37% Upside)

Avery Dennison demonstrates solid financial performance with strong profitability and operational efficiency. However, declining revenue and high leverage pose risks. The earnings call reflects resilience amidst challenges, but trade policy uncertainties and apparel segment struggles remain concerns. The valuation suggests fair pricing, with a moderate P/E ratio and dividend yield.

Positive Factors

Earnings

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

Financial Performance

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

Growth Potential

AVY has some of the highest EPS growth in the large-cap chemical/material arena, driven by growth in the Solutions segment with its RFID platform and the Materials segment.

Negative Factors

Demand Uncertainty

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.

Guidance

The 3Q guide was slightly below the consensus, reflecting continued uncertainty around tariffs.

Revenue Challenges

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

Avery Dennison Business Overview & Revenue Model

Company Description

Avery Dennison Corporation (AVY) is a global leader in labeling and packaging materials and solutions. The company operates in two main segments: Label and Graphic Materials, which includes pressure-sensitive materials, and Retail Branding and Information Solutions, which provides a variety of products including tags, labels, and RFID solutions. Avery Dennison serves a diverse range of industries, including food and beverage, consumer goods, pharmaceuticals, and logistics, with a focus on sustainability and innovation in its product offerings.

How the Company Makes Money

Avery Dennison generates revenue primarily through the sale of its labeling and packaging materials. The company's revenue model is based on several key streams: the production and sale of pressure-sensitive adhesives and labels, RFID tags and solutions, and various retail branding products. The majority of its revenue comes from its Label and Graphic Materials segment, where it sells to manufacturers and retailers. Additionally, the Retail Branding and Information Solutions segment contributes significantly by providing integrated solutions that enhance brand visibility and supply chain efficiency. Avery Dennison also benefits from strategic partnerships with key players in various industries, which enhance its market reach and product offerings. Factors such as the growing demand for sustainable packaging solutions and technological advancements in labeling and RFID technology further contribute to its earnings.

Avery Dennison Financial Statement Overview

Summary

Avery Dennison shows solid profitability with strong margins and return on equity. However, challenges include declining revenue and high leverage, which could impact future growth and financial stability. Effective debt management and focus on cash flow generation are crucial.

Income Statement

Avery Dennison's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) gross profit margin is healthy at 28.57%, and the net profit margin is stable at 8.14%. However, the company experienced a revenue decline of 16.9% in the TTM, indicating potential challenges in maintaining sales growth. The EBIT and EBITDA margins are solid, reflecting efficient operational management.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 1.61, indicating significant leverage, which could pose risks if not managed carefully. However, the return on equity is strong at 31.30%, suggesting effective use of equity to generate profits. The equity ratio is moderate, reflecting a balanced asset structure.

Cash Flow

Cash flow analysis shows a positive free cash flow growth rate of 5.85% in the TTM, indicating improved cash generation. The operating cash flow to net income ratio is 0.27, suggesting that cash flow from operations is lower relative to net income, which may impact liquidity. The free cash flow to net income ratio is robust at 76.94%, highlighting strong cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.74B	8.76B	8.36B	9.04B	8.41B	6.97B
Gross Profit	2.50B	2.53B	2.28B	2.40B	2.31B	1.92B
EBITDA	1.41B	1.38B	1.11B	1.37B	1.31B	1.06B
Net Income	711.00M	704.90M	503.00M	757.10M	740.10M	555.90M
Balance Sheet
Total Assets	8.57B	8.40B	8.21B	7.95B	7.97B	6.10B
Cash, Cash Equivalents and Short-Term Investments	215.90M	329.10M	215.00M	167.20M	162.70M	252.30M
Total Debt	3.55B	3.15B	3.24B	3.10B	3.10B	2.12B
Total Liabilities	6.37B	6.09B	6.08B	5.92B	6.05B	4.60B
Stockholders Equity	2.20B	2.31B	2.13B	2.03B	1.92B	1.50B
Cash Flow
Free Cash Flow	626.10M	730.00M	540.90M	662.50M	774.70M	532.70M
Operating Cash Flow	813.80M	938.80M	826.00M	961.00M	1.05B	751.30M
Investing Cash Flow	-185.50M	-243.10M	-459.00M	-332.70M	-1.74B	-554.20M
Financing Cash Flow	-622.50M	-576.10M	-317.20M	-615.20M	604.30M	-207.70M

Avery Dennison Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 172.25
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 172.25 is below the 20-day moving average (MA) of 173.04, below the 50-day MA of 176.57, and below the 200-day MA of 182.14, indicating a bearish trend. The MACD of -0.74 indicates Negative momentum. The RSI at 46.04 is Neutral, neither overbought nor oversold. The STOCH value of 66.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	$17.40B	19.30	20.51%	2.59%	8.98%	25.81%
AMCR	72 Outperform	$20.13B	27.27	6.55%	5.81%	10.03%	-28.33%
CCK	72 Outperform	$11.70B	21.11	20.64%	1.04%	2.07%	32.37%
AVY	70 Outperform	$13.63B	19.59	31.68%	2.08%	1.66%	14.38%
BALL	68 Neutral	$14.66B	25.14	9.59%	1.51%	-3.12%	―
SON	66 Neutral	$4.56B	30.97	3.98%	4.62%	0.90%	-118.86%
Sector *	61 Neutral	C$4.70B	7.12	15.29%	3.62%	3.22%	5.80%

Avery Dennison Corporate Events

Avery Dennison Appoints David Flitman to Board

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.