Avery Dennison (AVY) AI Stock Analysis

• Market Cap: $13.48B
• Dividend Yield: 2.03%
• Average Volume (3M): 914.69K
• Price to Earnings (P/E): 20.0
• Beta (1Y): 0.61
• Revenue Growth: 3.57%
• EPS Growth: N/A
• Country: US
• Employees: 35,000
• Sector: Consumer Cyclical
• Sector Strength: 63
• Industry: Business Equipment & Supplies
• EPS (TTM): 8.69
• Shares Outstanding: 78,965,996
• 10 Day Avg. Volume: 1,013,474
• 30 Day Avg. Volume: 914,687
• PEG Ratio: 0.49
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.58
• Price to Cash Flow (P/CF): 9.80
• P/FCF Ratio: 9.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $198.40
• Price Target Upside: 16.19% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

Avery Dennison's strong financial performance and strategic initiatives in growth areas are major strengths. Despite moderate leverage, effective cash flow management and robust profitability margins position the company well for future growth. Technically, the stock is under some bearish pressure, but valuation remains reasonable with a supportive dividend yield. The company's proactive approach to managing macroeconomic uncertainties adds positive sentiment. Overall, the stock is a solid performer with room for growth, balanced by some caution in technical indicators.

Positive Factors

Earnings Growth

AVY has some of the highest EPS growth in the large-cap chemical/material arena over the next three years.

Free Cash Flow

AVY's industry-leading free cash flow conversion and low leverage should provide some stability to earnings.

Global Production Capabilities

AVY's global production capabilities are a value add to its customers, as it is well-suited to aid its retail/apparel customers as they switch geographies and help absorb the impact of the tariffs.

Negative Factors

Emerging Markets Exposure

Deteriorating macro factors from tariffs and trade war uncertainty are heavily impacting AVY's exposure to emerging markets and key end-markets such as apparel, industrial, and logistics.

Macroeconomic 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.

Tariff Impact

The tariff impact on underlying demand is much harder to quantify for AVY.

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 makes money primarily through its two main business segments: Label and Graphic Materials (LGM) and Retail Branding and Information Solutions (RBIS). The LGM segment generates revenue by producing and selling pressure-sensitive label and packaging materials, which are used in various industries such as food, beverage, and pharmaceuticals. The RBIS segment contributes to the company's earnings by providing branding and information solutions, including tags, labels, and RFID inlays, which help improve inventory management and supply chain efficiency for retail businesses. Key partnerships with major consumer brands and retailers further enhance Avery Dennison's revenue streams, bolstered by the company's commitment to developing sustainable and innovative products.

Avery Dennison Financial Statement Overview

Summary

Avery Dennison displays strong financial health with consistent revenue growth, solid profitability margins, and effective cash flow management. The company's leverage is moderate, and while it has a strong return on equity, it needs to manage its debt levels prudently. Overall, Avery Dennison's financial statements indicate a well-positioned company in the industrial goods sector with healthy growth prospects.

Income Statement

Avery Dennison has demonstrated consistent revenue growth over the years with a notable increase from $8.36 billion in 2023 to $8.76 billion in 2024, marking a revenue growth rate of approximately 4.68%. The gross profit margin improved slightly to 28.90% in 2024. The net profit margin also increased to 8.05%, indicating effective cost management and operational efficiency. EBIT and EBITDA margins are strong at 12.82% and 15.79%, respectively, reflecting robust operational performance.

Balance Sheet

The debt-to-equity ratio stands at 1.36, indicating moderate leverage. However, the company's return on equity (ROE) improved to 30.39% in 2024, showcasing strong profitability relative to shareholder equity. The equity ratio is 27.58%, reflecting a balanced capital structure. While the company maintains adequate equity, it should be cautious of its debt levels.

Cash Flow

Avery Dennison achieved a healthy free cash flow growth rate of 34.91% from 2023 to 2024. The operating cash flow to net income ratio is robust at 1.33, indicating strong cash generation relative to net income. The free cash flow to net income ratio is also favorable at 1.04, demonstrating the company's capacity to generate cash beyond its accounting earnings.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Mar 2022	Mar 2021
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
	EBIT
1.12B	963.80M	1.08B	1.06B	856.70M
	EBITDA
1.38B	1.11B	1.37B	1.31B	1.06B
	Net Income Common Stockholders
704.90M	503.00M	757.10M	740.10M	555.90M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
329.10M	250.10M	167.20M	162.70M	252.30M
	Total Assets
8.41B	8.21B	7.95B	7.97B	6.10B
	Total Debt
3.15B	3.24B	3.10B	3.10B	2.12B
	Net Debt
2.82B	3.03B	2.93B	2.94B	1.86B
	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 Price: 170.75
• 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 170.75 is below the 20-day moving average (MA) of 171.54, below the 50-day MA of 177.25, and below the 200-day MA of 197.07, indicating a bearish trend. The MACD of -1.73 indicates Negative momentum. The RSI at 47.09 is Neutral, neither overbought nor oversold. The STOCH value of 57.08 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
AVY	75 Outperform	$13.48B	19.98	31.95%	2.03%	3.57%	―
PKG	73 Outperform	$16.99B	21.15	19.03%	2.71%	9.47%	19.39%
CCK	64 Neutral	$10.45B	25.21	16.41%	1.13%	-1.53%	-5.16%
SON	62 Neutral	$4.35B	26.73	6.42%	4.50%	-6.93%	-65.66%
Sector *	60 Neutral	$6.86B	11.61	3.16%	4.15%	2.41%	-21.45%
AMCR	59 Neutral	$13.79B	17.53	20.60%	5.29%	-3.54%	25.25%
BALL	48 Neutral	$14.28B	―	8.80%	1.58%	-15.64%	-186.66%

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.