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With a market cap of $15.1 billion, Mentor, Ohio-based Avery Dennison Corporation (AVY) is a global leader in materials science and digital identification solutions and operates in over 50 countries. The company specializes in pressure-sensitive materials, including papers, plastic films, and adhesives, serving industries such as home and personal care, food and beverages, and pharmaceuticals. AVY is expected to release its fiscal Q4 earnings results on Wednesday, Jan. 29.
Ahead of this event, analysts project the office products maker to report a profit of $2.37 per share, reflecting an increase of 9.7% from $2.16 per share in the year-ago quarter. The company holds a solid track record of consistently surpassing Wall Street's bottom-line estimates in the last four quarterly reports. In the most recent quarter, AVY surpassed the consensus EPS estimate by a slight margin.
For fiscal 2024, analysts forecast AVY to report EPS of $9.41 per share, up 19.1% from $7.90 per share in fiscal 2023. In addition, EPS is expected to grow 10.6% year-over-year to $10.41 in fiscal 2025.
Over the past 52 weeks, Avery Dennison has declined 4.1%, underperforming the broader S&P 500 Index's ($SPX) 27.2% gain and the Materials Select Sector SPDR Fund's (XLB) marginal return over the same time frame.
Despite Avery Dennison delivering better-than-expected Q3 adjusted earnings of $2.33 per share, shares fell 2.2% due to a revenue miss, as total revenue of $2.2 billion came in below the consensus estimate. Additionally, the company's Materials Group segment's adjusted operating profit of $222 million fell short of expectations, raising concerns about profitability in a key segment. Increased marketing, general, and administrative expenses of $347 million added pressure on margins. Broader market trends and cautious guidance for organic sales growth may have dampened enthusiasm despite the slight upward revision.
Analysts' consensus view on Avery Dennison stock is cautiously optimistic, with a "Moderate Buy" rating overall. Among 12 analysts covering the stock, seven suggest a "Strong Buy," one gives a "Moderate Buy," and four recommend a "Hold." As of writing, AVY is trading below the average analyst price target of $240.63.
