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Avery Dennison (AVY) AI Stock Analysis

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AVY

Avery Dennison

(NYSE:AVY)

Select Model
Rating:74Outperform
Price Target:$202.00▲(7.34% Upside)
Action:reiterated
Date:10/29/26

AVY scores well on fundamentals and outlook: strong profitability and cash generation (including >100% FCF conversion target) support a solid base score despite elevated leverage. Technically, the stock has positive momentum with price above key moving averages, though near-overbought readings temper the near-term view. Valuation is reasonable but not a clear catalyst at ~19.8x earnings with a ~2.15% yield, while guidance and productivity/restructuring progress are constructive despite destocking, cost inflation, and the delayed large-scale rollout timing.

Positive Factors
Strong cash generationAvery Dennison’s substantial operating and free cash flow supports internal funding for investment, debt reduction, dividends, and repurchases. High conversion also indicates that reported earnings are translating into cash, providing durable financial capacity over the next several quarters.
Negative Factors
Elevated leverageA relatively high debt burden reduces financial flexibility if industrial or consumer demand weakens. Although cash generation is strong, only moderate operating-cash-flow coverage means deleveraging may take time and can constrain acquisitions, investment, or shareholder returns.

Avery Dennison Key Performance Indicators (KPIs)

Revenue by SegmentShows how much each business segment contributes to total revenue, highlighting areas of strength and potential growth within the company’s diverse operations.

$0.00$500.00M$1.00B$1.50B$2.00B$2.50BMar 21Jun 21Sep 21Dec 21Mar 22Jun 22Sep 22Dec 22Mar 23Jun 23Sep 23Dec 23Mar 24Jun 24Sep 24Dec 24Mar 25Jun 25Sep 25Dec 25Mar 26Jun 26Sep 26
Chart Insights

Materials Group is the clear growth engine—recovering since 2024 with accelerating volume/mix and margin expansion—but Q2 strength was partly driven by customer pre‑buys, so expect some sequential pullback in Q3. Solutions is stabilizing with tangible margin improvement from productivity and program wins in apparel, though logistics remains a weak spot. Management’s reinstated guidance, strong free cash flow and buybacks signal confidence, but monitor raw‑material inflation and the timing of the pre‑buy unwind as near‑term risks to the topline and EPS cadence.

Data provided by:The Fly

Avery Dennison (AVY) vs. SPDR S&P 500 ETF (SPY)

-15%-10%-5%0%5%10%15%20%AVY+11.32%SPY+14.28%Dec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26Nov '26
Market Cap
$14.21B
Dividend Yield
2.06%
Average Volume (3M)
831.36K
Price to Earnings (P/E)
20.4
Beta (1Y)
0.52
Revenue Growth
6.77%
EPS Growth
4.93%
Country
US
Employees
35,000
Sector
Consumer Cyclical
Sector Strength
61
Industry
Packaging & Containers

Avery Dennison Business Overview & Revenue Model

Company Description

Avery Dennison Corporation operates as a materials science and digital identification solutions company in the North America, Europe, the Middle East, North Africa, Asia, and Latin America. It offers pressure-sensitive label materials, which consist...

How the Company Makes Money

Avery Dennison makes money primarily by manufacturing and selling specialized materials and finished components used in labeling, packaging, branding, and product identification. 1) Core revenue stream: sale of label and packaging materials (Label an...

Avery Dennison Earnings Call Summary

Earnings Call Date:Oct 29, 2026(Q3-2026)|% Change Since:4.14%|Next Earnings Date:Feb 03, 2027
Earnings Call SentimentPositive

The call was predominantly positive. Avery Dennison delivered better-than-expected third-quarter results, estimated stronger underlying growth after adjusting for destocking, generated robust free cash flow, expanded Solutions Group margins, raised the full-year guidance midpoint and highlighted significant Intelligent Labels, productivity and share-gain opportunities. These positives were tempered by ongoing customer destocking, Materials Group and company-level margin pressure, logistics declines, cautious consumer demand, cost inflation and the delayed Walmart Fresh commercial ramp.

Positive Updates

Strong Third-Quarter Results and Underlying Growth
Organic sales grew 4% and adjusted EPS grew 2% year-over-year to $2.42, exceeding expectations. After considering customer inventory management, management estimated underlying organic sales growth of 6% and adjusted EPS growth of 8%.

Negative Updates

Customer Inventory Destocking Remained a Headwind
Customer inventory destocking unfavorably impacted company sales by roughly 2 points and adjusted EPS by roughly $0.15, or 6 points, in the quarter. Destocking is ongoing, with the vast majority of first-half prebuy inventory expected to unwind by the end of the fourth quarter, primarily in Europe.

Company Guidance

For full year 2026, Avery Dennison is narrowing adjusted EPS guidance to $10.10 to $10.24, with the new midpoint representing roughly 7% growth year-over-year; reported sales growth is expected to be approximately 5.5%, including organic sales growth of approximately 3.5%, approximately 1.5 points from currency translation, roughly 1 point from the Taylor Adhesives acquisition and approximate 40 basis point headwind from the calendar adjustment. Guidance includes incremental restructuring savings now exceeding $65 million, a net EPS benefit of approximately $0.30 from favorable currency translation and lower share count, stronger free cash flow targeting conversion of greater than 100% for the year, and capital expenditures anticipated approximately $240 million; the vast majority of the remaining balance of customer inventory destocking is expected to conclude by the end of the fourth quarter, which will also have an approximate 1.5% headwind to sales growth and modest headwind to EPS growth from the calendar shift, while Intelligent Labels food is expected to deliver robust growth next year, with a commercial ramp through '27 and double-digit growth over the next couple of years.

Avery Dennison Financial Statement Overview

Summary

Strong operating profile supported by a TTM rebound in revenue (~+25%), healthy EBIT/EBITDA margins (~12%/~16%), and robust free cash flow generation (~$1.04B; ~86% of net income). The main constraint is elevated leverage (debt-to-equity ~1.6x; OCF-to-debt ~0.41x), which increases downturn sensitivity, and some cyclicality/volatility in revenue and free cash flow.

Income Statement

78Positive

Balance Sheet

64Positive

Cash Flow

71Positive
Financial statement breakdown
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue9.36B8.86B8.76B8.36B9.04B8.41B
Gross Profit2.70B2.55B2.53B2.27B2.40B2.31B
EBITDA1.46B1.39B1.38B1.11B1.37B1.31B
Net Income708.30M688.00M704.90M503.00M757.10M740.10M
Balance Sheet
Total Assets9.17B8.80B8.40B8.21B7.95B7.97B
Cash, Cash Equivalents and Short-Term Investments271.40M202.80M367.20M215.00M167.20M162.70M
Total Debt3.62B3.73B3.15B3.24B3.10B3.10B
Total Liabilities6.78B6.56B6.09B6.08B5.92B6.05B
Stockholders Equity2.39B2.24B2.31B2.13B2.03B1.92B
Cash Flow
Free Cash Flow1.03B712.40M730.00M540.90M662.50M774.70M
Operating Cash Flow1.22B881.40M938.80M826.00M961.00M1.05B
Investing Cash Flow-686.20M-596.00M-243.10M-459.00M-332.70M-1.74B
Financing Cash Flow-799.60M-414.90M-576.10M-317.20M-615.20M604.30M

Avery Dennison Technical Analysis

Technical Analysis SentimentPositive
Last Price188.18

Price Trends

50DMA175.63Positive
100DMA171.99Positive
200DMA170.71Positive

Market Momentum

MACD4.10Negative
RSI62.00Neutral
STOCH59.41Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVY, the sentiment is Positive. The current price of 188.18 is above the 20-day moving average (MA) of 183.36, above the 50-day MA of 175.63, and above the 200-day MA of 170.71, indicating a bullish trend. The MACD of 4.10 indicates Negative momentum. The RSI at 62.00 is Neutral, neither overbought nor oversold. The STOCH value of 59.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AVY.

Avery Dennison Risk Analysis

Avery Dennison disclosed 37 risk factors in its most recent earnings report. Avery Dennison reported the most risks in the "Finance & Corporate" category.

Higher RiskSector Avg.Lower RiskFinance & CorporateTech & InnovationLegal & RegulatoryProductionAbility to SellMacro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added

3 New Risks
1.Our infrastructure needs impact our business and expenditures.Q4, 2023
2.For us to remain competitive, deliver on our business strategy and avoid business disruption, it is important to recruit high caliber talent, retain key management and highly-skilled employees and receive high quality service from all outsourced service providers. This includes providing market-competitive compensation and benefits and ensuring a diverse, equitable and inclusive workplace.Q4, 2023
3.Epidemics, pandemics or other outbreaks of illness, and restrictions intended to prevent their spread, could materially adversely impact our business.Q4, 2023

Avery Dennison Peers Comparison

Overall Rating

UnderperformOutperform
Sector (61)

Financial Indicators

AVY against its peers
NameOverall RatingMarket CapP/E RatioROEDividend YieldRevenue GrowthEPS Growth
AVYAVY74Outperform$14.27B20.3630.62%2.06%6.77%4.93%
CCKCCK71Outperform$13.32B16.9227.10%1.15%13.75%-11.09%
AMCRAMCR69Neutral$20.89B18.969.32%5.86%37.30%36.83%
Sector *61Neutral$18.38B12.79-2.54%3.03%1.52%-15.83%
SWSW54Neutral$23.20B49.472.61%4.06%1.11%-37.06%
GPKGPK50Neutral$3.30B44.282.27%3.97%0.35%-85.33%
SONSON45Neutral$4.92B-23.51-6.12%4.33%3.56%-11673.60%

* Consumer Cyclical Sector Average

Performance Comparison

-40%-20%0%20%40%AVYCCKGPKSONSWAMCRDec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26Nov '26
AVY and its peers over the selected period
Show on chartTickerCompany NamePriceChange% Change
AVYAvery Dennison188.1815.719.11%
CCKCrown Holdings122.0222.3022.37%
GPKGraphic Packaging Holding11.07-4.41-28.50%
SONSonoco Products Company49.609.6624.19%
SWSmurfit Westrock PLC44.0310.3830.85%
AMCRAmcor44.393.959.76%

Avery Dennison Corporate Events

Business Operations and StrategyExecutive/Board Changes

Avery Dennison Appoints Helen Sheirbon to Lead Solutions

Positive
Oct 13, 2026

On October 9, 2026, Avery Dennison’s board elected Helen J. Sheirbon as president of its Solutions Group and an executive officer, with her appointment effective November 3, 2026, following her departure from HP Inc. at the end of October. The move b...

Executive/Board Changes

Avery Dennison Chief Legal Officer Announces Upcoming Resignation

Neutral
Oct 5, 2026

Avery Dennison Corporation reported that Senior Vice President and Chief Legal Officer Ignacio J. Walker has decided to resign from his position to pursue another professional opportunity. He notified the company of his decision on September 30, 2026...

Business Operations and StrategyExecutive/Board Changes

Avery Dennison Announces New Independent Board Chair

Positive
Aug 19, 2026

On August 18, 2026, Avery Dennison’s Board of Directors unanimously elected William Wagner as independent Board Chair, effective September 1, 2026, for the remainder of the term ending at the 2027 Annual Meeting of Stockholders. Mitchell Butier will...

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Oct 29, 2026