Analysts Are Updating Their Avery Dennison Corporation (NYSE:AVY) Estimates After Its First-Quarter Results

It's been a good week for Avery Dennison Corporation (NYSE:AVY) shareholders, because the company has just released its latest quarterly results, and the shares gained 3.7% to US$217. It was a credible result overall, with revenues of US$2.2b and statutory earnings per share of US$2.13 both in line with analyst estimates, showing that Avery Dennison is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Avery Dennison

After the latest results, the eleven analysts covering Avery Dennison are now predicting revenues of US$8.75b in 2024. If met, this would reflect a modest 3.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 33% to US$9.14. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$8.77b and earnings per share (EPS) of US$9.01 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$226. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Avery Dennison analyst has a price target of US$260 per share, while the most pessimistic values it at US$158. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 4.8% growth on an annualised basis. That is in line with its 5.6% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 2.7% annually. So although Avery Dennison is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Avery Dennison. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Avery Dennison going out to 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 2 warning signs for Avery Dennison that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.