Avery Dennison (AVY) AI Stock Analysis

• Market Cap: $13.22B
• Dividend Yield: 2.04%
• Average Volume (3M): 676.37K
• Price to Earnings (P/E): 21.1
• Beta (1Y): 0.62
• 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: 76,877,940
• 10 Day Avg. Volume: 693,058
• 30 Day Avg. Volume: 676,366
• 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: 1.27
• Enterprise Value/Revenue: 1.89
• Enterprise Value/Gross Profit: 6.58
• Enterprise Value/Ebitda: 12.85
• 1Y Price Target: $213.17
• Price Target Upside: 23.97% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 10.18
• Revenue Forecast (FY): $9.26B

• Rating: 70 Outperform
• Price Target: $188.00 ▲(9.33% 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 & returns

Consistent, high free cash flow (≈$0.7B in 2025) with >100% conversion and large shareholder returns demonstrates durable internal funding for buybacks, dividends and reinvestment. This underpins capital allocation flexibility and cushions the business through cyclical downcycles.

Resilient mid‑teens EBITDA margins

Sustained mid‑teens EBITDA margins across segments reflect pricing power, cost discipline and product mix resilience. Durable margin profile supports profitability through volume swings and funds strategic investments in higher‑value offerings without degrading returns.

Shift to high‑value portfolio & intelligent labels

A structural shift toward high‑value products and intelligent labels increases exposure to higher-margin, technology‑led applications (food, logistics). This repositions revenue mix toward recurring, differentiated solutions and supports sustained multi-year growth beyond apparel retail.

Negative Factors

Meaningful leverage

A debt‑heavy capital structure reduces balance‑sheet flexibility and increases interest and refinancing risk if macro conditions deteriorate. Even with strong cash flow, elevated gross debt versus equity constrains strategic optionality and raises sensitivity to earnings volatility.

Limited organic revenue momentum

Weak organic growth guidance indicates reliance on currency and M&A to lift reported sales. Limited sustainable top‑line momentum pressures operating leverage and forces management to rely on margin expansion, cost actions, or further acquisitions to meet longer‑term targets.

Elevated inventories & working capital pressure

Rising inventories and higher working‑capital needs tied to high‑value mix increase cash conversion volatility and can strain liquidity during demand slowdowns. With meaningful leverage, elevated working capital magnifies balance‑sheet and cash‑flow risks over the medium term.

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	1.30B	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: Negative
• Last Price: 171.95
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

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 171.95 is below the 20-day moving average (MA) of 186.06, below the 50-day MA of 186.47, and below the 200-day MA of 175.02, indicating a bearish trend. The MACD of -4.66 indicates Positive momentum. The RSI at 28.15 is Positive, neither overbought nor oversold. The STOCH value of 9.48 is Positive, 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
CCK	71 Outperform	$12.02B	16.16	25.41%	1.01%	2.94%	893.70%
SON	71 Outperform	$5.30B	10.96	32.44%	4.33%	8.31%	-99.39%
AVY	70 Outperform	$13.22B	21.15	31.18%	2.04%	1.03%	5.52%
PKG	69 Neutral	$19.18B	24.15	16.73%	2.42%	7.23%	-3.88%
SLGN	63 Neutral	$4.46B	14.78	13.03%	1.97%	11.10%	6.54%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
GPK	58 Neutral	$2.93B	15.73	13.67%	2.91%	-3.93%	-27.37%

Avery Dennison Corporate Events

Avery Dennison Updates Bylaws and Director Retirement Policies

On February 26, 2026, Avery Dennison’s board approved an amendment and restatement of the company’s bylaws that tightens disclosure and procedural requirements around shareholder proposals and director nominations. Proposing shareholders must now disclose any material interest they or their beneficial owners have in business brought before shareholder meetings, and the company’s secretary is required to provide a standardized questionnaire and representation form within ten days of a stockholder of record’s request.

The revised bylaws also remove certain references to the nature of board determinations and raise the mandatory retirement age for directors from 72 to 75, aligning corporate governance practices with updated guidelines adopted the same day and prevailing market standards. These changes collectively refine Avery Dennison’s governance framework, potentially enhancing board continuity while imposing more structured disclosure obligations on activist or engaged shareholders.

The most recent analyst rating on (AVY) stock is a Buy with a $210.00 price target. To see the full list of analyst forecasts on Avery Dennison stock, see the AVY Stock Forecast page.