Avery Dennison Corporation (AVY) Stock Analysis
By stockpickr AI | March 1, 2026 | 10 min read
Investment Summary
Avery Dennison Corporation (AVY) is a well-established industrial company that appears undervalued based on a DCF analysis, suggesting potential upside from its current market price.
Investment Recommendation
Buy
Fair Value: 185.5
Current Price: 159.8
Upside/Downside: +16.1%
Based on a Discounted Cash Flow analysis projecting robust free cash flow generation and a reasonable terminal growth rate, the implied fair value per share for Avery Dennison is estimated to be higher than its current market price. This suggests an attractive entry point for investors seeking capital appreciation.
Key Metrics
- Market Cap: $16.3B
- P/E Ratio: 21.8x
- Forward P/E: 19.3x
- Revenue Growth (YoY): 3.0%
- Net Margin: 8.5%
- ROE: 28.5%
- Debt/Equity: 0.85
- Dividend Yield: 1.96%
Strengths
- Leading global market share in pressure-sensitive materials and labeling solutions.
- Strong brand recognition and established customer relationships across diverse industries.
- Commitment to innovation and sustainability, driving new product development and market differentiation.
- Resilient business model benefiting from essential consumer goods and industrial applications.
Risk Factors
- Sensitivity to raw material price fluctuations (e.g., petrochemicals, paper) impacting cost of goods sold.
- Exposure to global economic slowdowns and geopolitical events that affect demand.
- Intensifying competition from both established players and emerging regional competitors.
- Potential for supply chain disruptions impacting production and delivery.