Avery Dennison: Anticipation Builds for Q4 Earnings Release
Analysts Forecast Positive Trends Despite Recent Stock Performance
With a market cap of $15.1 billion, Mentor, Ohio-based Avery Dennison Corporation (AVY) stands as a key player in materials science and digital identification solutions across over 50 countries. The company focuses on pressure-sensitive materials, including papers, plastic films, and adhesives, catering to sectors such as home and personal care, food and beverages, and pharmaceuticals. Investors are keenly awaiting the company’s fiscal Q4 earnings, set to be announced on Wednesday, Jan. 29.
Leading up to this announcement, analysts anticipate the office products giant will deliver a profit of $2.37 per share, marking a 9.7% increase from the $2.16 per share reported in the same quarter last year. Avery Dennison has shown a strong ability to exceed Wall Street earnings expectations consistently, achieving this in the last four reported quarters. In its most recent quarter, the company narrowly beat the consensus EPS estimate.
Looking ahead to fiscal 2024, forecasts suggest that AVY will produce earnings of $9.41 per share, indicating a 19.1% rise from $7.90 per share in fiscal 2023. Further projections estimate EPS growth of 10.6% year-over-year to reach $10.41 in fiscal 2025.
In the past 52 weeks, Avery Dennison has seen a decline of 4.1%, trailing behind the S&P 500 Index’s ($SPX) impressive 27.2% gain and the Materials Select Sector SPDR Fund’s (XLB) limited returns over the same period.
Despite posting stronger-than-expected Q3 adjusted earnings of $2.33 per share, shares dropped 2.2% following a revenue miss. The company reported total revenue of $2.2 billion, which fell short of analysts’ estimates. Concerns over profitability also rose as the adjusted operating profit of Avery Dennison’s Materials Group segment was $222 million, below expectations. Furthermore, escalating marketing, general, and administrative expenses totaling $347 million pressured margins. Market trends and cautious guidance regarding organic sales growth may have contributed to a more subdued investor sentiment despite an upward revision.
Analysts maintain a cautiously optimistic view on Avery Dennison stock, with a “Moderate Buy” rating overall. Among the 12 analysts covering the stock, seven advocate for a “Strong Buy,” one recommends a “Moderate Buy,” while four suggest a “Hold.” Currently, AVY trades below the average analyst price target of $240.63.
On the date of publication, Sohini Mondal did not hold any positions in the securities mentioned in this article. All information and data provided are for informational purposes. To learn more, please refer to the Barchart Disclosure Policy here. More news from Barchart
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