On Thursday, Baird reaffirmed its Outperform rating on Avery Dennison shares (NYSE:AVY), with a steady price target of $250.00. The firm's assessment supports the view that Avery Dennison's long-term financial goals up to 2028 reflect a continuation of the company's strong growth dynamics. These include its focus on high-value categories and RFID technology, which are seen as key drivers for Avery Dennison's favorable long-term investment profile.
The endorsement of the stock's performance comes as Avery Dennison is perceived to be capitalizing on robust intrinsic growth factors. The company's strategy is anchored in expanding into high-value segments and leveraging the potential of RFID (Radio Frequency Identification) technology, which is expected to see broader adoption across various high-profile end-markets.
Baird's price target is founded on a projected earnings per share (EPS) of $10.50 for the year 2025, applying an earnings multiple of approximately 24 times. This valuation reflects confidence in Avery Dennison’s ability to sustain its growth trajectory and achieve its financial targets over the coming years.
The analyst's commentary highlights the consistency in Avery Dennison's financial objectives, suggesting that the company's updated targets through 2028 do not deviate significantly from its previous goals. This implies a steady path forward, with Avery Dennison continuing to harness growth opportunities in its chosen markets.
Avery Dennison's investment appeal is further enhanced by the anticipation of RFID technology's expansion into additional markets. The firm's analysis indicates that Avery Dennison is well-positioned to benefit from these developments, reinforcing the Outperform rating. The $250 price target held by Baird remains unchanged, affirming the firm's positive outlook on Avery Dennison's stock performance.
In other recent news, Avery Dennison Corporation (NYSE:AVY) exceeded earnings expectations with a Q2 earnings per share (EPS) of $2.42, leading to an increased full-year earnings guidance to a range of $9.30 to $9.50 per share. Despite anticipating a mid-single-digit percentage decline in Q3 EPS due to seasonal volume drops, the company expects record revenue in Q4 and aims for over 20% volume growth in intelligent labels for the year.
Analysts at Truist Securities maintained a Buy rating on Avery Dennison, while UBS downgraded the company from a "Buy" to a "Neutral" rating, citing concerns over slower growth in the RFID segment. BMO Capital Markets also revised its outlook, reducing its price target on the stock to $254 from $256, but maintained an Outperform rating.
In other recent developments, Compass Diversified announced the appointment of Stephen Keller as the new Chief Financial Officer. Keller, who brings over 25 years of executive finance experience, will succeed Ryan Faulkingham, who is stepping down after more than a decade of service.
The transition is part of Compass Diversified's ongoing strategy to leverage its permanent capital base and long-term disciplined approach to value creation.
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