Is AVY's stock performance below par compared to the Consumer Cyclical sector?
Let's dive into the world of Avery Dennison Corporation (AVY), a wildly successful global materials science and digital identification solutions giant. This powerhouse specializes in pressure-sensitive materials, labeling, and packaging solutions, and RFID-based information technologies. You can find their products gracing a vast array of industries like retail, automotive, pharmaceuticals, or logistics – this company's reach is truly unmatched.
Considering that companies with a market cap over $10 billion are dubbed "large-cap" stocks, AVY seamlessly fits the bill. With a market cap of around $13.6 billion, Avery Dennison has a broad global presence, serving clients in diverse sectors such as home and personal care, food and beverage, apparel, e-commerce, and more.
But how has AVY been fairing on the stock exchange? Even with shares pulling back by 25.5% from its 52-week high of $233.48, there's still room for optimism. Although AVY stock has slipped by 3.3% over the past three months, it's crucial to remember that, during the same period, the Materials Select Sector SPDR Fund (XLB) only saw a marginal rise.
Since its inception last year, the stock has fallen 7.1% on a year-to-date (YTD) basis, lagging when compared to XLB's 3.4% gain. However, it's essential not to overlook the fact that AVY stock has dipped 23.4% over the past 52 weeks – a steeper decline than XLB's 2.8% fall during the same period.
Curiously, the stock has been trading below its 200-day moving average since late October 2024. Let's dive deeper into the Stranger Things happening in AVY's stock market world.
This intrigue escalates as shares of Avery Dennison fell by 2.6% on Apr. 23, 2025, after the company reported its Q1 2025 adjusted EPS of $2.30, missing analysts' expectations. Furthermore, despite pulling its annual forecast due to macroeconomic uncertainty, it shifted to quarterly guidance, projecting a Q2 adjusted EPS of $2.30 to $2.50 – underperforming the analyst consensus midpoint of $2.47. There was also a decline in revenue from its core materials group, causing the total revenue to slip to $2.2 billion – matching expectations but mirroring weak momentum.
In a somewhat Klaus Menzinger move, Avery Dennison's competitor, Smurfit Westrock Plc (SW), has lagged behind the game. Shares of Smurfit Westrock have witnessed a 21.3% drop on a YTD basis – providing a fascinating comparison between the two industry titans.
Despite this underperformance relative to the sector, analysts remain somewhat hopeful about AVY, with a consensus rating of "Moderate Buy," and the stock currently trading below the mean price target of $196.85 (as of writing).
In conclusion, Avery Dennison's stock is priced around $176, showcasing a solid dividend yield, moderate valuation metrics, and a market cap of approximately $13.6 billion. The majority of analysts are generally bullish, expecting up to 18-19% upside over the next year, thanks to strong fundamentals and recent positive momentum in business segments. However, there's also a sprinkle of caution regarding inventory destocking and valuation concerns, casting a mixed but largely positive outlook on AVY's future.
- According to current market cap, Avery Dennison Corporation (AVY) can be classified as a large-cap stock, making it an appealing option for investors seeking to invest in the stock market.
- Despite experiencing a 25.5% pullback from its 52-week high, Avery Dennison's stock remains a consideration for investors, particularly when compared to the Materials Select Sector SPDR Fund (XLB), which has only seen marginal growth over the same period.
