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.