Avery Dennison (AVY) AI Stock Analysis

• Market Cap: $14.32B
• Dividend Yield: 2.05%
• Average Volume (3M): 740.37K
• Price to Earnings (P/E): 21.1
• Beta (1Y): 0.63
• Revenue Growth: 3.57%
• EPS Growth: 26.92%
• Country: US
• Employees: 35,000
• Sector: Consumer Cyclical
• Sector Strength: 60
• Industry: Business Equipment & Supplies
• EPS (TTM): 2.30
• Shares Outstanding: 78,175,560
• 10 Day Avg. Volume: 1,050,501
• 30 Day Avg. Volume: 740,369
• PEG Ratio: -43.53
• Price to Book (P/B): 6.38
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 23.19
• Enterprise Value/Market Cap: 1.19
• Enterprise Value/Revenue: 0.49
• Enterprise Value/Gross Profit: 6.74
• Enterprise Value/Ebitda: 3.03
• 1Y Price Target: $200.10
• Price Target Upside: 9.20% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 71 Outperform
• 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 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 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 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

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

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

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	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
EBITDA	1.41B	1.38B	1.11B	1.37B	1.31B	1.06B
Net Income	698.80M	704.90M	503.00M	757.10M	740.10M	555.90M
Balance Sheet
Total Assets	8.35B	8.41B	8.21B	7.95B	7.97B	6.10B
Cash, Cash Equivalents and Short-Term Investments	195.90M	329.10M	250.10M	167.20M	162.70M	252.30M
Total Debt	3.46B	3.15B	3.24B	3.10B	3.10B	2.12B
Total Liabilities	6.18B	6.09B	6.08B	5.92B	6.05B	4.60B
Stockholders Equity	2.17B	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

• Technical Analysis Sentiment: Positive
• Last Price: 183.24
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PKG	75 Outperform	$18.20B	21.18	20.07%	2.47%	9.47%	19.37%
AVY	71 Outperform	$14.32B	21.09	31.95%	2.05%	3.57%	26.92%
SON	71 Outperform	$4.59B	30.23	5.54%	4.56%	-4.58%	-61.14%
CCK	70 Outperform	$12.56B	23.19	21.30%	0.96%	0.90%	34.40%
BALL	69 Neutral	$16.29B	31.16	8.23%	1.36%	-9.79%	―
AMCR	67 Neutral	$22.20B	17.28	20.71%	5.29%	-2.29%	24.05%
Sector *	62 Neutral	$16.85B	11.50	-7.38%	2.96%	1.59%	-23.36%

Avery Dennison Corporate Events

Gregory S. Lovins to Resume CFO Role at Avery Dennison

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.