Avery Dennison Corp (AVY)

Price—Loading quote

AI: Fair-priced

Price checkThe current price reasonably reflects Avery Dennison’s cash generation and expected growth.

At the August 14 close of $178.93, the shares trade at 18.7 times the midpoint of management’s 2026 reported earnings forecast of $9.55 per share, or 17.6 times its adjusted forecast of $10.15. Adjusted earnings exclude about $0.60 of restructuring and other items. Against 2025 free cash flow—cash left after operations and capital spending—of $712 million, the price implies a 5.2% cash yield. That is reasonable, not a clear bargain, so Fair-priced fits best.

Big pictureCash generation is durable, but demand swings and higher debt limit downside protection.

Sales reached $8.86 billion in 2025, still below 2022’s $9.04 billion. When demand weakened in 2023, revenue fell 7.5% and net income dropped 34%, demonstrating real cyclicality. Nevertheless, annual free cash flow remained positive throughout 2020–2025, ranging from $550 million to $792 million. At June 2026, net debt was $2.95 billion, versus $2.23 billion at December 2024. Management measured net debt at 2.3 times adjusted operating cash earnings, while current assets covered current liabilities by only 1.13 times.

Business strengthBetter margins and fewer shares strengthen ownership value, although recent spending exceeded cash generation.

Gross margin—sales remaining after product costs—improved to 28.8% in 2025 from 27.6% in 2020. Second-quarter 2026 adjusted operating margins reached 15.8% in Materials and 11.5% in Solutions. Shareholders also benefited from an 8.7% reduction in outstanding shares since 2020, comfortably exceeding dilution from employee awards. However, 2025 buybacks and dividends totaled $861 million, above $712 million of free cash flow, while debt rose $650 million. First-half 2026 distributions of $347 million were better covered by $477 million of free cash flow.

What could change the storySustained volume growth and debt reduction could lift value; temporary demand could erase it.

The bull case is that second-quarter organic growth of 7.6%, meaning growth excluding acquisitions and currency changes, becomes durable and higher-value identification products expand margins. That could make today’s valuation conservative. The bear case is that customer pre-buying reverses, Solutions growth remains weak, and acquisition spending keeps leverage elevated. The price effectively assumes adjusted earnings near $10 per share can grow at a mid-single-digit rate. Sustained second-half growth, free cash flow matching earnings, and net debt falling below twice adjusted operating cash earnings would strengthen the case; misses would weaken it.

$178.93 price considered

AI: News

Second-quarter earnings surgeA large earnings beat lifted expectations, though some demand was pulled forward from later quarters.

On July 30, 2026, revenue rose 10.9% to $2.46 billion, organic growth reached 7.6%, and adjusted earnings increased 19.4% to $2.89 per share. Management forecast full-year adjusted earnings of $10.00–$10.30. The shares closed 4.6% higher that day, although timing does not prove sole causation. Company materials and subsequent reporting indicated customer pre-buying benefited the quarter and could reverse later, making the second-half demand pattern important.

Wiliot sensor investmentAvery Dennison invested in connected sensors to expand its higher-growth product identification business.

On April 27, 2026, Avery Dennison made a $75 million minority investment in Wiliot and became its preferred inlay design, manufacturing, and commercial partner. The arrangement could expand Avery Dennison’s role from selling identification labels toward supplying sensors and related services. The company funded the investment with cash and short-term borrowing, so adoption must eventually produce worthwhile returns. No reliable isolated share-price reaction was established.

Taylor Adhesives acquisitionThe flooring-adhesives purchase added specialized products but materially increased the company’s financial obligations.

Avery Dennison completed the Taylor Adhesives acquisition on October 20, 2025, for approximately $390 million, versus projected annual revenue of about $110 million. The purchase therefore cost roughly 3.5 times sales and was funded with cash and new senior notes. It expands Materials into higher-value flooring adhesives, but it also helps explain the rise in net debt and reduces balance-sheet flexibility until acquired profits and cash generation justify the price. No dependable standalone market reaction was identified.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014	2013	2012	2011	2010	2009	2008
Revenue	$8.86B	$8.76B	$8.36B	$9.04B	$8.41B	$6.97B	$7.07B	$7.16B	$6.61B	$6.09B	$5.97B	$6.33B	$6.14B	$5.86B	$5.84B	$5.78B	$5.19B	$6.71B
Gross profit	$2.55B	$2.53B	$2.28B	$2.40B	$2.31B	$1.92B	$1.90B	$1.92B	$1.81B	$1.70B	$1.65B	$1.65B	$1.64B	$1.53B	$1.48B	$1.51B	$1.26B	$1.73B
Research & development	$136.6M	$137.8M	$135.8M	$136.1M	$136.6M	$112.8M	$92.6M	$98.2M	$93.4M	$89.7M	$91.9M	$102.5M	$96.0M	$98.6M	$93.8M	$88.4M	$78.9M	—
Net income	$688.0M	$704.9M	$503.0M	$757.1M	$740.1M	$555.9M	$303.6M	$467.4M	$281.8M	$320.7M	—	—	—	—	$190.1M	$316.9M	−$746.7M	$266.1M
Basic EPSper diluted share	$8.81	$8.77	$6.23	$9.28	$8.93	$6.67	$3.61	$5.35	$3.19	$3.60	$3.01	$2.61	$2.17	$2.10	$1.80	$3.00	-$7.21	$2.70
Diluted EPSper diluted share	$8.79	$8.73	$6.20	$9.21	$8.83	$6.61	$3.57	$5.28	$3.13	$3.54	$2.95	$2.56	$2.13	$2.08	$1.78	$2.97	-$7.21	$2.70

Review source filings at SEC.gov ↗

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)142$54.84M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Mar 12, 2026Form 4 · 10b5-1	Butier Mitchell RDirector	SellCommon Stock	857	$173.50	$148.7K	198.1K
Mar 12, 2026Form 4 · 10b5-1	Butier Mitchell RDirector	SellCommon Stock	3.0K	$172.66	$522.6K	199.0K
Mar 12, 2026Form 4 · 10b5-1	Butier Mitchell RDirector	SellCommon Stock	3.0K	$171.80	$511.4K	202.0K
Mar 12, 2026Form 4 · 10b5-1	Butier Mitchell RDirector	SellCommon Stock	5.0K	$170.69	$849.9K	205.0K
Mar 12, 2026Form 4 · 10b5-1	Butier Mitchell RDirector	SellCommon Stock	1.2K	$169.71	$196.9K	210.0K

Review ownership filings at SEC.gov ↗

Avery Dennison Corp (AVY)

Financial charts

Financial statements

Insider buys & sells