Analysts have slightly lowered their fair value estimate for Avery Dennison from $195.25 to $191.33 per share. They attribute the adjustment to tempered sector expectations and modest changes in revenue growth and profitability assumptions.
Analyst Commentary
Analyst sentiment on Avery Dennison remains mixed, with recent updates reflecting both optimism and caution regarding the company’s outlook and valuation.
Bullish Takeaways- Bullish analysts have increased their price targets, signaling increased confidence in the company's medium-term value despite sector-wide headwinds.
- Updates to revenue and profitability projections show faith in Avery Dennison’s ability to adapt to evolving paper and packaging market conditions.
- Anticipation of second quarter results suggests that expectations, while tempered, still leave room for positive surprises in execution.
- Focused cost management and operational discipline continue to support the longer-term growth narrative, even in a subdued market environment.
- Bearish analysts highlight that sector expectations remain muted, which may limit the upside potential in the near term.
- Moderate increases in price targets reflect only incremental improvements rather than a strong growth reacceleration.
- There is caution around how quickly Avery Dennison can meaningfully improve profitability amid ongoing demand uncertainty in packaging markets.
- Concerns linger about broader macroeconomic volatility, potentially constraining both valuation expansion and revenue growth rates in upcoming quarters.
What's in the News
- TransAct Technologies has acquired a perpetual, royalty-free license to Avery Dennison's BOHA! software for $2.55 million, plus $1.0 million in professional services fees. The fully supported version is expected to launch in early 2027. (Client Announcements)
- The company completed a share buyback of 58,110 shares, representing 0.07%, for $10.32 million between April 24, 2025 and June 28, 2025. (Buyback Tranche Update)
- Avery Dennison expects third-quarter 2025 reported earnings per share to be between $2.14 and $2.30. (Corporate Guidance, New/Confirmed)
- Between March 30, 2025 and June 28, 2025, the company repurchased 508,590 shares, representing 0.65%, for $87.24 million, completing a larger buyback totaling nearly 5% of shares since 2022. (Buyback Tranche Update)
Valuation Changes
- Fair Value Estimate has decreased from $195.25 to $191.33 per share, reflecting a modest revision downward.
- Discount Rate has risen slightly from 6.96% to 7.11%, indicating marginally higher perceived risk in projections.
- Revenue Growth assumptions have increased very modestly from 4.04% to 4.08%.
- Net Profit Margin estimate has edged down from 9.24% to 9.22%, showing little change.
- Future P/E multiple has decreased from 18.66x to 18.39x, which suggests a slightly more conservative valuation outlook.
Disclaimer
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