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Avery Dennison Corp AVY

Rating as of

Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Solid Label and RFID Sales Make for Robust Fourth-Quarter Results for Avery Dennison

Charles Gross Equity Analyst

Analyst Note

| Charles Gross |

Avery Dennison's fourth quarter was a robust conclusion to a tumultuous year. Sales rose 12.3% to $1.99 billion, with just under half the increase attributable to an additional workweek. The label and retail branding businesses both did quite well, thanks to the ongoing rebound in global manufacturing and shipping activity, along with RFID uptake. We've lifted our near-term outlook to account for stronger near-term profitability. Management's 2021 guidance toward $7.65 to $8.05 in adjusted EPS should be achievable, assuming the global recovery continues. We've lifted our fair value estimate to $98 per share from $93, and our no-moat rating is unchanged. With shares trading more than 60% above our fair value, they look significantly overvalued at this time.

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Company Profile

Business Description

Avery Dennison manufactures pressure-sensitive materials, merchandise tags, and labels. The company also runs a specialty converting business that produces radio-frequency identification inlays and labels. Avery Dennison draws a significant amount of revenue from outside the United States, with international operations accounting for the majority of total sales.

Contact
207 Goode Avenue
Glendale, CA, 91203
T +1 626 304-2000
Sector Industrials
Industry Business Equipment & Supplies
Most Recent Earnings Dec 31, 2020
Fiscal Year End Jan 2, 2022
Stock Type Cyclical
Employees 32,000