BMO Capital Markets has adjusted its price target for Avery Dennison Corporation (NYSE: NYSE:AVY), a producer of pressure-sensitive materials and a variety of tickets, tags, labels, and other converted products.
The firm lowered the target to $252 from $254 while maintaining an Outperform rating on the stock.
The adjustment came after Avery Dennison's recent investor day, where the company showcased the strength of its two core platforms. According to the analyst from BMO Capital, Avery Dennison is expected to continue driving double-digit earnings per share (EPS) growth, supported by over 5% top-line growth and continued margin improvements.
Avery Dennison's targets for its business segments, including a 15%+ growth in Radio-Frequency Identification (RFID) and a 17%+ increase in margins, were also highlighted.
The analyst noted these projections could be on the conservative side as the company benefits from increased industrial label penetration and a shift toward higher-value materials applications.
In other recent news, Avery Dennison Corporation reported a strong Q2 performance with earnings per share (EPS) of $2.42, exceeding expectations. This led to an increased full-year earnings guidance, with the company now expecting a range of $9.30 to $9.50 per share.
Despite a projected mid-single-digit percentage decline in Q3 EPS due to seasonal volume drops, Avery Dennison anticipates record revenue in Q4 and targets over 20% volume growth in intelligent labels for the year.
Analyst firms have expressed varying views on Avery Dennison's prospects. Baird reaffirmed its Outperform rating, maintaining a price target of $250.00 based on the company's strong growth dynamics. Truist Securities also maintained a Buy rating with a steady price target of $258.00, expressing confidence in the company's growth trajectory.
However, UBS downgraded Avery Dennison from a "Buy" to a "Neutral" rating, citing concerns over slower growth in the RFID segment, and BMO Capital Markets adjusted its price target to $254 from $256, while maintaining an Outperform rating.
InvestingPro Insights
As BMO Capital Markets reiterates its confidence in Avery Dennison Corporation (NYSE:AVY) with an updated price target, InvestingPro data and tips offer additional insights into the company's financial health and market performance. Avery Dennison, with its consistent track record of raising dividends, has increased its dividend for 13 consecutive years and has maintained dividend payments for 54 consecutive years, illustrating a strong commitment to shareholder returns. This is particularly noteworthy for income-focused investors considering the company's stock.
InvestingPro data underscores Avery Dennison's market position with a substantial market capitalization of $16.86 billion. While the company trades at a high P/E ratio of 26.99, reflecting a premium relative to near-term earnings growth, it also showcases a solid gross profit margin of 28.81% over the last twelve months as of Q2 2024. These metrics indicate that while the stock may be priced at a premium, the company maintains a healthy profit margin. Additionally, Avery Dennison's revenue has grown by 1.14% over the same period, suggesting steady growth in its business operations.
For investors seeking further analysis and a comprehensive list of metrics, additional InvestingPro Tips for Avery Dennison are available, providing a deeper dive into the company's financials and market performance. For instance, the platform lists a total of 9 additional tips for potential and current investors, including insights into earnings revisions and stock volatility, which can be accessed at https://www.investing.com/pro/AVY. With the next earnings date on October 23, 2024, these tips could be pivotal for investors making informed decisions ahead of the company's financial updates.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.