Baird Reiterates Outperform on Avery Dennison, Sees Strong Long-Term Growth Drivers

Avery Dennison Corporation (NYSE:AVY), a prominent figure in the materials science and digital identification solutions industry, has recently disclosed its financial outcomes for the quarter ending September 2025. The company, operating within the Zacks Containers - Paper and Packaging industry, competes with other significant entities in the sector.

• Earnings Per Share (EPS) of $2.37, surpassing the estimated $2.32, indicating a 2.16% earnings surprise and showing an improvement from the previous year.
• Reported revenue of $2.22 billion for the quarter, slightly below the estimated $2.26 billion but still marking a 1.5% increase year-over-year.
• The company's financial metrics reveal a price-to-earnings (P/E) ratio of approximately 19.40 and a debt-to-equity ratio of 1.61, highlighting its market valuation and financial health.

On October 22, 2025, Avery Dennison reported an EPS of $2.37, outperforming the anticipated $2.32. This result signifies a 2.16% earnings surprise, as emphasized by Zacks, and demonstrates an enhancement from the $2.33 reported in the corresponding quarter of the previous year, indicating sustained growth in profitability.

The company generated revenue of $2.22 billion for the quarter ending September 2025. Although this figure fell slightly short of the projected $2.26 billion, it still represents a 1.5% increase from the $2.18 billion reported in the same period last year. The revenue exceeded the Zacks Consensus Estimate of $2.21 billion, resulting in a positive surprise of 0.03%.

Avery Dennison's financial metrics offer insights into its market valuation and financial health. The company has a price-to-earnings (P/E) ratio of approximately 19.40, reflecting investor expectations of future earnings growth. Its price-to-sales ratio is about 1.58, indicating how the market values its sales. The enterprise value to sales ratio stands at 1.96, while the enterprise value to operating cash flow ratio is around 21.04.

The company's debt-to-equity ratio is 1.61, suggesting a higher reliance on debt for financing. Despite this, Avery Dennison maintains a current ratio of approximately 1.04, indicating its ability to cover short-term liabilities with short-term assets. The earnings yield of about 5.15% reflects the return on investment for shareholders, showcasing the company's potential for delivering value.

BofA Securities analysts upgraded Avery Dennison (NYSE:AVY) to Buy from Underperform, raising the price target on the stock to $250 from $207. The decision reflects growing optimism about market conditions and the company's positioning, particularly within e-commerce and packaging markets.

Avery Dennison shares had underperformed the market by approximately 15% year-to-date. However, the analysts noted signs of improvement in box markets, alongside an enhanced outlook for e-commerce, which could drive higher demand for Avery’s label and packaging materials. This trend aligns with a broader Bank of America report projecting positive impacts on corrugated shipments and Avery’s label-related business lines.

The bank emphasized that Avery Dennison's diverse product portfolio, particularly in its value-added pressure-sensitive materials, provides a competitive edge over some European peers facing headwinds. The analysts also highlighted the firm’s forecast for strong Economic Value Added (EVA) and Return on Invested Capital (ROIC) in the coming years, suggesting sustained financial health and growth potential.

Concerns among investors surfaced following a preannouncement of weaker results by a European competitor. However, Avery Dennison’s recent analyst day reassured investors with a cautious yet strategic outlook for its Materials segment, reinforcing BofA’s upgraded outlook and supporting confidence in Avery’s robust market positioning as demand recovers.

BofA Securities analysts upgraded Avery Dennison (NYSE:AVY) to Buy from Underperform, raising the price target on the stock to $250 from $207. The decision reflects growing optimism about market conditions and the company's positioning, particularly within e-commerce and packaging markets.

Avery Dennison shares had underperformed the market by approximately 15% year-to-date. However, the analysts noted signs of improvement in box markets, alongside an enhanced outlook for e-commerce, which could drive higher demand for Avery’s label and packaging materials. This trend aligns with a broader Bank of America report projecting positive impacts on corrugated shipments and Avery’s label-related business lines.

The bank emphasized that Avery Dennison's diverse product portfolio, particularly in its value-added pressure-sensitive materials, provides a competitive edge over some European peers facing headwinds. The analysts also highlighted the firm’s forecast for strong Economic Value Added (EVA) and Return on Invested Capital (ROIC) in the coming years, suggesting sustained financial health and growth potential.

Concerns among investors surfaced following a preannouncement of weaker results by a European competitor. However, Avery Dennison’s recent analyst day reassured investors with a cautious yet strategic outlook for its Materials segment, reinforcing BofA’s upgraded outlook and supporting confidence in Avery’s robust market positioning as demand recovers.

Baird analysts reiterated their Outperform rating for Avery Dennison (NYSE:AVY) with a price target of $250 on the stock.

The analysts highlighted that the company’s long-term financial targets through 2028 largely mirror its previous projections, reinforcing the idea that Avery Dennison continues to benefit from strong growth drivers, particularly in high-value categories and RFID technology. They view these factors as supporting an attractive long-term investment profile. The analysts also noted that additional key markets are on the verge of adopting RFID technology, which could further boost the company’s prospects.

The $250 price target is based on a valuation of approximately 24x the analyst’s 2025 EPS estimate of $10.50.