Earnings Update: Avery Dennison Corporation (NYSE:AVY) Just Reported Its Yearly Results And Analysts Are Updating Their Forecasts

Last week, you might have seen that Avery Dennison Corporation (NYSE:AVY) released its annual result to the market. The early response was not positive, with shares down 3.0% to US$186 in the past week. Results were roughly in line with estimates, with revenues of US$8.8b and statutory earnings per share of US$8.73. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Avery Dennison

Taking into account the latest results, the most recent consensus for Avery Dennison from twelve analysts is for revenues of US$9.04b in 2025. If met, it would imply a satisfactory 3.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to expand 12% to US$9.86. Before this earnings report, the analysts had been forecasting revenues of US$9.19b and earnings per share (EPS) of US$10.49 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at US$212, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Avery Dennison at US$250 per share, while the most bearish prices it at US$169. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Avery Dennison's past performance and to peers in the same industry. We would highlight that Avery Dennison's revenue growth is expected to slow, with the forecast 3.3% annualised growth rate until the end of 2025 being well below the historical 4.9% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.3% per year. Factoring in the forecast slowdown in growth, it seems obvious that Avery Dennison is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$212, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Avery Dennison going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Avery Dennison .

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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.