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Avery Dennison Corp AVY

Morningstar Rating
$227.05 +0.02 (< 0.01%)
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Company Report

Avery Dennison Earnings: Inventory Destocking Finally Relents, Driving Revenue and Margin Growth

Narrow-moat Avery Dennison reported solid first-quarter results that came with few surprises. Organic sales increased 3% year over year as both the materials and the solutions groups experienced top-line growth. Consolidated operating margins expanded 260 basis points to 11.8% on a strong performance from the materials group. Destocking headwinds continue to moderate, which has relieved pressure on volumes and enabled margin expansion during the quarter. This is a welcome development for Avery after a challenging 2023, and we expect this trend will lead to solid earnings growth through 2024. As such, we've increased our fair value estimate to $158 from $154 per share due to higher near-term profitability in our forecast.

Price vs Fair Value

AVY is trading within a range we consider fairly valued.
Price
$227.05
Fair Value
$976.00
Uncertainty
Medium
1-Star Price
$569.90
5-Star Price
$666.90
Economic Moat
Djjqyc
Capital Allocation
Ybmjjcdk

Bulls Say, Bears Say

Bulls

Emerging-market adoption of consumer-packaged goods will provide a long runway for sales growth.

Bears

Competitors could increase their RFID inlay production due to recent market growth and force Avery to compete on price.

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News

Trading Information

Previous Close Price
$227.03
Day Range
$225.91228.77
52-Week Range
$158.93229.98
Bid/Ask
$90.82 / $361.00
Market Cap
$18.29 Bil
Volume/Avg
197,602 / 420,384

Key Statistics

Price/Earnings (Normalized)
26.80
Price/Sales
2.18
Dividend Yield (Trailing)
1.43%
Dividend Yield (Forward)
1.55%
Total Yield
1.97%

Company Profile

Avery Dennison manufactures pressure-sensitive materials, merchandise tags, and labels. The company also runs a specialty converting business that produces radio-frequency identification, or RFID, 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.
Sector
Consumer Cyclical
Industry
Packaging & Containers
Stock Style Box
Mid Core
Total Number of Employees
35,000

Competitors

Valuation

Metric
AVY
MMM
HON
Price/Earnings (Normalized)
26.8010.5121.01
Price/Book Value
8.3011.547.89
Price/Sales
2.181.723.59
Price/Cash Flow
19.359.5621.35
Price/Earnings
AVY
MMM
HON

Financial Strength

Metric
AVY
MMM
HON
Quick Ratio
0.501.191.18
Current Ratio
0.871.641.66
Interest Coverage
7.28−7.279.46
Quick Ratio
AVY
MMM
HON

Profitability

Metric
AVY
MMM
HON
Return on Assets (Normalized)
8.34%10.67%9.52%
Return on Equity (Normalized)
32.77%71.61%35.30%
Return on Invested Capital (Normalized)
14.14%23.61%16.16%
Return on Assets
AVY
MMM
HON
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