Analyst Note| Charles Gross |
Avery Dennison posted a robust first quarter amid early signs of an economic rebound in parts of the world. Organic sales rose nearly 9% versus the prior year, to $2.05 billion. The strong start to 2021, combined with favorable currency translation, has led management to significantly raise its adjusted EPS expectations to $8.60 versus $7.85. The new target looks achievable, assuming North America, Europe, and Asia continue their economic recovery. We have raised our fair value to $107 per share from $98 due to a weaker dollar and a brighter near-term outlook for Avery. Our no-moat rating is unchanged.