Avery Dennison AVY
Consumer Cyclical · Packaging & Containers · Synthos Deep Dive · 2026-07-03
The Overview
Avery Dennison makes the sticky label material that goes on almost everything — the price tags and barcodes on your clothes, the labels on shampoo bottles and food packages, and the little RFID tags stores use to track inventory. It is the biggest company in the world at this, and it is genuinely well-run and profitable.
The stock is priced about fairly — not a bargain, not expensive. You pay roughly 19 times one year of profit, plus you collect a ~2.3% dividend. The problem isn't the company; it's that the business grows slowly (sales creep up a few percent a year) and it goes up and down with the economy — when people buy fewer clothes or ship fewer boxes, Avery sells less material. Over the last year the stock actually fell about 8% while the overall market rose 21%.
Our verdict is Watch: a solid company at a fair price, but nothing here is exciting enough to buy today, and — importantly — no expert we track has a view on it, so we're relying only on the numbers.
Here's what our three scores mean in everyday terms:
- Downside Risk 5/10 (middle). Financially sound and the stock is calm, but it carries a normal amount of debt and its sales rise and fall with the economy.
- Growth Quality 5/10 (average). A good, steady business — but it grows slowly, so "good" not "great."
- Exponential Potential 2/10 (low). This will not double quickly. It's a mature, slow-growing name.
The one big worry: if the economy slows and people buy fewer clothes and ship fewer packages, Avery's sales and profits dip — that's the main thing that moves this stock.
Putting a number on it: our fair-value estimate is $178 against a current price of $177.75 — real upside if our numbers are right.
Our summary metrics
Investment-grade but 2.5× net-debt/EBITDA and cyclical demand; low beta 0.83 & 19× P/E cushion it.
~4% forward revenue / ~12% EPS CAGR, flat-to-slow margins, solid 12% ROIC — steady, not special.
Mature, cyclical materials converter; ~4% top-line and decelerating — no exponential path.
What does “fair value” mean?
Fair value is Synthos’s estimate of what one share is worth today, based on our model of the company’s future cash generation and the risks to it. It is not a price target or a prediction of where the stock trades next quarter — it’s the price where we think risk and reward are balanced. Above it, you’re paying for outcomes better than our base case; below it, the market is offering a margin of safety.
The model’s inputs and weightings are proprietary — they’re the product. What we publish is the output, plus an independent, public-math cross-check further down the page (“Check our number”) so you can judge it for yourself.
What do the 5 tiers mean? (Core · Tactical · Watch · Hold · Avoid)
Exponential Potential
Mature, cyclical materials converter; ~4% top-line and decelerating — no exponential path.
What could take this further than the base case — and where the market may be underpricing it. Full forward-growth and acceleration math in Deeper analysis, §4 below.
Deeper analysis
Technicals, fundamentals, valuation, and the full expert-claim evidence panel — the detail behind the numbers above.
Reference table
| Street consensus | $207 (high $224 / low $175; 13 Buy · 5 Hold · 0 Sell) — context, not our anchor |
| Valuation | 19× trailing EPS · 16.7× FY26E · 15.0× FY27E · 13.4× FY28E · EV/S 1.8× · EV/EBITDA 11.5× |
| Technicals | Weak — $167, −15% off 52-wk high, above 50-DMA but below 200-DMA, RSI 67, −8% 12-mo vs SPY +21% |
| Conviction | Low — 0 expert voices, 0 traceable claims in the Synthos KB; call rests on fundamentals + quant |
| Position sizing | Watch-list / small only, ≤2% if bought on a cyclical dip; not a flagship core |
What the experts actually said
No independent expert claims in the Synthos knowledge base yet for AVY — this dive is fundamentals- and technicals-driven, not panel-driven.
Price & moving averages 12 months · 50 & 200-day averages · 52-week range
Solid line = price · dashed line = 50-day average · dotted line = 200-day average · the two thin horizontal lines mark the 52-week high and low. Price above both averages is an uptrend.
Data summary: last close $177.75, 5% above the 50-day average ($169), 3% above the 200-day average ($173) — an uptrend. 10% below the 52-week high of $197, 16% above the 52-week low of $153.
Bollinger Bands 20-day average ± 2 standard deviations
The shaded band widens when the stock gets more volatile. Riding the upper edge = strong momentum (sometimes stretched); the lower edge = weak / potentially oversold.
Data summary: price $177.75 is currently inside the band (band $172–$185).
RSI (14) momentum gauge · 0–100
Above 70 (overbought zone, shaded) = overbought, below 30 (oversold zone, shaded) = oversold. Currently 53.
MACD 12 / 26 / 9 · trend & momentum
The MACD line crossing above the signal line (bars flip to the up color) = momentum turning up; crossing below (bars flip to the down color) = turning down. Bar height = the size of that gap.
Data summary: MACD is currently below its signal line by 0.75, negative momentum.
Relative performance vs S&P 500 & its sector (XLY (sector)), set to 100 a year ago
Solid = AVY · dashed = S&P 500 · dotted = XLY (sector). A rising line means it is beating that benchmark — the sector line shows whether it is a leader or laggard within its own group.
Forward revenue & earnings actual → estimate · "FY" = fiscal year, "E" = estimate
Darker bars = actual results, brighter = analyst estimates. Taller bars to the right = expected growth.
Key stats an RIA wants
1. What it is
Avery Dennison (NYSE: AVY) is a ~90-year-old materials-science and digital-identification company headquartered in Mentor, Ohio, with ~35,000 employees. It is the global #1 in pressure-sensitive label materials — the coated papers, films and foils (Fasson brand) that converters turn into labels for food, beverage, personal care, pharma and logistics — and a leader in retail branding and RFID (apparel tags, item-level RFID, loss-prevention and the Vestcom shelf-edge business). Fiscal year now ends December 31 (it shifted to a calendar year in 2026).
Revenue mix (FY2025, from filings):
- By segment: Materials Group / Label & Graphic Materials ~$6.0B (~68%) · Solutions Group / Retail Branding & Information Solutions ~$2.74B (~31%). The Materials Group is the ballast (steady, high-share, coated-materials); the Solutions Group is the higher-growth, higher-margin RFID/branding leg. (FY2025 segment figures in the FMP feed show a data-vendor sign glitch — negative placeholders — so we use the FY2024 $6.01B / $2.74B split, which is representative of the stable ~68/31 mix.)
- By geography (FY2025): United States $2.75B (~31%) · Asia $2.73B (~31%) · Europe $2.46B (~28%) · Latin America $0.57B · Other $0.35B. Roughly two-thirds of revenue is non-US — a global-industrial-cycle and FX exposure, not a US-concentration story.
The strategic story is (a) defend and modestly grow the label-materials share leader, and (b) scale intelligent labels / RFID as the structural growth engine — item-level tagging expanding from apparel into food, logistics, and general retail.
2. The expert thesis — why the panel is (not) covering it (traceable)
There is no expert coverage of AVY in the Synthos knowledge base. total_claims = 0, net_bullish_voices = 0, and the top array is empty. We will not manufacture conviction we do not have: no claim_id is cited in this note because none exists.
That is itself a signal — AVY is a mature industrials/materials compounder, not the kind of AI-, biotech- or platform-disruption name our expert panel (podcasters, fund managers, operators) tends to discuss. The absence of coverage is neither bullish nor bearish; it simply means this verdict is entirely fundamentals- and quant-driven, and should be weighted accordingly. Where a conviction name like our flagships leans on a reconciled expert panel, AVY leans only on the financial statements, the analyst estimates, and the price tape below.
3. Synthos scores & the Bull / Base / Bear cases
The one-glance judgment — three scores, 0–10, each anchored to real metrics (not probabilities we can't honestly calibrate):
| Score | 0–10 | The read |
|---|---|---|
| Downside Risk (lower = safer) | 5 · Moderate | Net-debt/EBITDA 2.5× and cyclical volume demand are real, but beta 0.83, 19× trailing P/E, 8× interest coverage and a 42% payout dividend cushion the downside. B+ letter rating (score 3/5). |
| Growth Quality | 5 · Average | ~4% forward revenue CAGR, ~12% EPS CAGR (helped by buybacks + mix), 12% ROIC, 30% ROE, 28.8% gross margin — a good, wide-moat business that simply grows slowly. |
| Exponential Potential | 2 · Low | Mature, cyclical materials converter. Revenue growth is low-single-digit and decelerating (FY26E +4.7% → FY27E +3.5% → FY28E +4.2%). RFID is a real but incremental kicker, not a J-curve. |
The three cases (our own scenario model — assumptions shown; each target is a ~12–18-month fair value). We deliberately do not attach probabilities: the base case is by definition the expected path, so a weighted blend would just restate it with false precision. The cases bound the range; the scores above summarize them.
| Case | Key assumptions | Fair value |
|---|---|---|
| Bull | Volume demand re-accelerates; RFID scales into food/logistics; FY27E EPS beats to ~$12.0 and the multiple re-rates to ~18.5× on a cyclical upturn. | ~$225 (+35%) |
| Base (our anchor) | Estimates roughly hit — FY27E EPS ~$11.12; a steady mid-single-digit compounder holds a ~16× multiple. | ~$178 (+7%) |
| Bear | Industrial/apparel recession; volumes fall, pricing slips, EPS stalls near ~$9.5 and the multiple de-rates to ~13.5× on cyclical fear. | ~$130 (−22%) |
Synthos fair value = the base case, ~$178 (+7%), with the full $130–$225 span as the honest range. Our anchor sits well below the Street's $207 consensus — we are more cautious than the sell side because the top line is only growing ~4% and the stock's own 12-month tape (−8% vs SPY +21%) says the market is not rewarding the story right now. This is a tracked call — the Forecaster Scorecard grades it once it matures.
4. Exponential Potential
Synthos separates compounders (durable high returns on capital) from exponentials (accelerating, multi-baggers-from-here). AVY is a decent compounder with essentially no exponential profile:
- Forward growth: revenue CAGR FY25→FY28E ~4.1% ($8.86B → ~$10.0B); EPS CAGR ~12.2% ($8.80 → ~$12.42E) — but the EPS growth is manufactured, not organic: it comes from margin mix + ~3–4% annual share shrink (buybacks), on top of ~4% sales growth.
- Acceleration (the 2nd derivative) is flat-to-negative: revenue growth ~+1.1% (FY25) → +4.7% (FY26E) → +3.5% (FY27E) → +4.2% (FY28E). No inflection. This is a GDP-plus business, not a category in take-off.
- Room to run: at $12.8B market cap the company is small enough that a re-rate could move the stock, but the binding constraint is the demand pool — pressure-sensitive labels track global consumption and industrial output, which grow low-single-digit. RFID is the one genuinely-expanding TAM, but it is still a minority of Solutions-Group revenue.
- Reinvestment runway: modest capex (~$170M, <2% of sales) and heavy buybacks (−$572M FY25) — this is a return-capital compounder, not a reinvest-for-hypergrowth story. Appropriate for the business, but it caps the ceiling.
Exponential Potential: Low (2/10). Own AVY, if at all, for steady mid-single-digit compounding plus a dividend and buyback — never for a fast multibagger. Nothing in the numbers supports an exponential thesis.
5. Financials (real numbers — FMP annual/quarterly)
- Revenue: FY25 $8.856B, +1.1% (FY24 $8.756B; FY23 $8.364B). Slow, steady top line — recovered off the 2020 trough ($6.97B) but essentially flat vs the 2022 peak ($9.04B). This is the definition of a mature cyclical.
- Quarterly trajectory: Q1'25 $2.148B → Q2 $2.221B → Q3 $2.216B → Q4 $2.271B → Q1'26 $2.299B (+7.0% YoY) — a gentle acceleration into 2026, worth watching but not dramatic.
- Margins: gross 28.8% TTM, EBITDA 15.7%, operating ~12.4%, net 7.7% TTM. Thin-ish net margin is normal for a materials converter; the story is stability, not expansion.
- Earnings: net income $688M FY25 (vs $705M FY24 — down slightly); diluted EPS $8.78 (vs $8.73). Q1'26 EPS $2.18, net income $168M. EPS is grinding up mostly via share count (77.4M shares FY25 vs 80.7M FY24).
- Cash flow: operating CF $881M, capex −$169M, FCF ~$712M FY25 (FCF yield ~5.6%). Reliable free cash generation; ~$288M went to dividends, ~$572M to buybacks — more than 100% of FCF returned, funded partly by debt.
- Balance sheet: total debt $3.73B, net debt $3.53B, net-debt/EBITDA ~2.5× — investment-grade (B+ letter rating) and serviceable (8× interest coverage), but rising (net debt was $2.82B a year ago, up on a $402M acquisition and buybacks). Not a fortress; a normally-levered industrial.
6. Valuation — priced in or room?
AVY is reasonably — not cheaply — valued. Trailing 18.8× P/E, 1.8× EV/sales, 11.5× EV/EBITDA, ~5.6% FCF yield, 2.3% dividend. On forward estimates the multiple compresses to 16.7× FY26E → 15.0× FY27E → 13.4× FY28E as EPS grinds higher. Against a ~12% forward EPS CAGR that is a PEG near ~1.4× forward — fair, neither a screaming bargain nor demanding. The FMP letter rating is B+ (overall 3/5), dinged specifically on debt-to-equity (1/5) and P/E-to-book (price/book 5.6×, tangible book is negative on goodwill). Street targets (context): consensus $207, high $224, low $175, median $221 — the sell side sees ~24% upside. We are more conservative: our $178 base sits below the Street's low target because a ~4%-growth cyclical trading at 16–17× forward, with a lagging tape and rising leverage, does not warrant chasing. Not a value trap, but not a value buy either — a fair-price hold.
7. Technicals (from the tech block)
- Trend: mixed-to-weak. $166.97 sits above the 50-DMA ($160.64) but below the 200-DMA ($172.43) — the 50 under the 200 is a death-cross posture, i.e. a downtrend that is trying to stabilize. MACD mildly positive (+1.28).
- Location: −15.4% off the 52-week high ($197.45), +9.1% off the 52-week low ($153.01); max drawdown from peak −27%. A name well off its highs, not at them.
- Momentum: RSI(14) 67 — approaching overbought (<70) on the recent bounce, so this is not a washed-out entry despite the poor 12-month tape.
- Relative strength (the tell): AVY −7.8% 12-mo vs SPY +20.6% and QQQ +30.3%; −3.5% 3-mo vs SPY +13.7%. Persistent, broad underperformance of both the market and growth. The price action is not confirming a bull case.
- Read: technicals argue for patience. Below the 200-DMA, lagging badly, and bouncing into overbought — a poor risk/reward for a fresh buy. A pullback that holds the 50-DMA (~$161) or a reclaim of the 200-DMA (~$172) on volume would be a cleaner setup.
8. Moat & competitive position
AVY's moat is real but narrow-and-cyclical: (1) global scale and share leadership in pressure-sensitive materials — the low-cost coater with the broadest converter network (Fasson), a genuine cost-and-distribution advantage; (2) switching costs / spec-in at large CPG and apparel customers who qualify materials into their packaging and labeling lines; (3) a technology edge in RFID/intelligent labels, where AVY (Smartrac inlays) is the category leader as item-level tagging expands. The offsets: the core is a commoditizing, raw-material-and-volume-sensitive business where pricing is passed through (not expanded), and demand is tied to apparel, retail, logistics and industrial cycles.
Peer set (FMP-supplied, market cap): these are industrial comps, not label pure-plays — Allegion $12.1B, ATI $25.7B, CNH Industrial $13.3B, Graco $12.5B, Huntington Ingalls $11.5B, Lincoln Electric $14.2B, Masco $16.7B, Textron $16.1B, WESCO $15.0B, LATAM Airlines $16.5B. The truer competitive frame is other packaging/materials names (UPM Raflatac, CCL Industries, Fedrigoni, 3M in tapes) — AVY carries a premium multiple to the industrial-cyclical group, justified by its share leadership and RFID optionality, but not by its growth rate.
9. Management, capital allocation & guidance
- Capital allocation: disciplined return-of-capital — ~$288M dividends (42% payout, ~2.3% yield) + ~$572M buybacks in FY25, plus a $402M bolt-on acquisition; capex kept lean at <2% of sales. Net debt rose to ~2.5× EBITDA to fund it, which is the one thing to monitor. CEO Deon Stander.
- Insider activity: the recent Form 4s (filed 2026-05-04) are routine director RSU awards and exempt conversions (grant/vesting mechanics, not open-market discretionary selling) — no meaningful signal either way in the sampled window.
- Management's own guidance (half-weighted — their own book): the SEC 8-K route returned AVY's Q1 2026 financial-review supplement (filed 2026-04-28), but the retrievable text is the safe-harbor / non-GAAP boilerplate front matter, not the quantified outlook table — so we do not have management's specific dated revenue/EPS guidance numbers to summarize honestly. Q1'26 itself beat (EPS $2.47 actual vs $2.43 est; revenue $2.299B vs $2.260B est). Gap flagged: full guidance and Q&A are not captured on our current data plan; we can add them via a free transcript source. We will not fabricate a guidance range.
10. Catalysts & what to watch
- Next earnings: 2026-07-30 (Q2'26; Street EPS $2.46, revenue ~$2.29B). Key line: organic volume growth (ex-currency, ex-acquisition) — the real demand tell — plus RFID/Solutions-Group growth and margin.
- RFID / intelligent-labels adoption: expansion beyond apparel into food, logistics and general retail is the single biggest structural swing factor — watch unit growth and new-vertical wins.
- Volume vs price: as a pass-through converter, the mix of volume (cyclical demand) vs price/currency determines organic growth; two quarters of positive volume would materially improve the story.
- Leverage: net-debt/EBITDA trending back toward ~2× (from 2.5×) would de-risk the balance sheet and support buybacks.
- Cyclical macro: apparel/retail demand, global industrial production, and FX (two-thirds of revenue is non-US).
Thesis tripwires (what would change the call): a durable re-acceleration in organic volume (upgrade toward Buy — Tactical); or, on the downside, a demand rollover with net-debt/EBITDA pushing >3× and the dividend/buyback under pressure (downgrade toward Avoid).
11. Key risks
- Cyclicality (structural): volumes track apparel, retail, logistics and industrial cycles — a global slowdown directly cuts sales and thin net margins. This is the dominant risk.
- Slow growth / no catalyst: ~4% top line means the equity return leans on buybacks, multiple and dividend, not organic compounding — limited upside without a demand or RFID inflection.
- Leverage rising: net-debt/EBITDA at ~2.5× and climbing (to fund buybacks + M&A); a downturn would pressure coverage and capital return.
- Raw-material & FX swings: paper, film and resin input costs plus two-thirds non-US revenue make results sensitive to commodity and currency moves.
- Tape / relative strength: the stock has lagged the market by ~28 points over 12 months and sits below its 200-DMA — momentum is against it.
- No expert conviction: zero coverage in the Synthos KB — the call rests solely on fundamentals and quant, with no independent panel to corroborate it.
12. Verdict, position sizing & monitoring
Watch. Avery Dennison is a genuinely good, wide-moat, well-run materials leader at a fair (not cheap) price — 19× trailing / ~15× FY27E, 2.3% dividend, reliable FCF, real RFID optionality. But it is a mature, cyclical, ~4%-top-line business whose stock has lagged the market badly (−8% vs SPY +21% over 12 months), sits below its 200-DMA, carries rising 2.5× leverage, and has no expert conviction behind it in our KB. The base-case fair value (~$178, +7%) offers only modest upside over the current price and sits well below the Street's $207 — not enough edge to buy today.
- Sizing: watch-list. If owned, keep it small (≤2%) and preferably added on a cyclical dip that holds the 50-DMA (~$161) or on evidence of organic-volume re-acceleration — not chased into overbought below the 200-DMA.
- Monitoring: re-underwrite on the §10 tripwires; formal re-score each earnings print (next 2026-07-30). This verdict is logged as a tracked Synthos call as of 2026-07-03 at $166.97.
- Single biggest risk: cyclical volume demand — a global apparel/retail/industrial slowdown is what moves this stock.
Provenance & disclosures
- Traceability: 0 KB claims, breadth 0 — there is no expert coverage of AVY in the Synthos knowledge base, so no
claim_idis cited. This verdict is explicitly fundamentals- and quant-driven. Fabricated conviction is structurally impossible (claim-ID reconciliation), and here we simply have none to reconcile. - Data as-of: fundamentals 2026-03-31 (Q1'26) · estimates & prices 2026-07-02/03 · no expert claims. Forward figures are analyst consensus (FMP), labeled as estimates.
- Data caveats: FY2025 product-segment figures in the FMP feed carry a vendor sign glitch; we use the representative FY2024 ~68/31 split. Management's specific forward guidance was not available in retrievable form from the SEC 8-K (only safe-harbor boilerplate) — not summarized rather than fabricated.
- Management caveat: any management commentary is management's own book, half-weighted by design.
- Not investment advice. Independent research, educational and informational only, never personalized. Hypothetical/forward figures are labeled; the only performance numbers Synthos will headline are the live, real-money Flagship's.
- Version: 2026-07-03. Prior versions available via the deep-dive version dropdown ("based on the info at the time").