تحليلات المنتج الاختيارية
بإذنك، نستخدم تحليلات محدودة تراعي الخصوصية لفهم مسارات البحث الفعالة. لا نستخدم أدوات تتبع إعلانية أو تسجيل الجلسات. يمكنك تغيير هذا الخيار في التفضيلات. اقرأ سياسة الخصوصية.
Secular expansion of Intelligent Labels RFID solutions beyond apparel into massive greenfield categories including perishable food/protein (e.g.
Customer inventory destocking in Materials Group accelerating in 2H 2026, combined with mid-single-digit raw material cost inflation that converters resist passing through.
Avery Dennison Corporation combines market leadership in pressure-sensitive materials with high-margin secular expansion in Intelligent Labels RFID solutions, but shares currently trade at a 5.92% premium to intrinsic fair value while facing guided customer destocking headwinds in 2H 2026.
Avery Dennison delivered strong preliminary Q2 2026 results, generating net sales of $2.46B (up 10.9% reported and 7.6% organically) and adjusted EPS of $2.89 (up 19.4% YoY). Materials Group led performance with 15.9% reported sales growth (9.7% organic) and an adjusted operating margin of 15.8%. However, management highlighted that approximately half of 1H 2026 organic sales growth (~2.5% of 5% total) was driven by customer inventory building rather than underlying end-market consumption. This dynamic contributed approximately $0.25 to Q2 EPS and is guided to reverse into an equivalent $0.25 per share sequential headwind in Q3, tempering full-year 2026 organic growth guidance to 3% to 4%.
The company's long-term investment case is supported by high cash conversion and secular technology adoption. In 1H 2026, Avery Dennison generated $469.8M in adjusted free cash flow, representing 126% of net income, while returning $347M to shareholders via $198M of share repurchases and $149M of dividends. In Solutions Group, the $0.9B Intelligent Labels business is advancing beyond apparel into enterprise perishable food (e.g. Kroger protein rollouts) and parcel logistics. Furthermore, restructuring actions are on track to deliver >$60M in savings in 2026, offsetting input inflation and incentive compensation normalization.5
At the October 13, 2026 share price of $170.72, Avery Dennison trades at 15.29x forward P/E and at a 5.92% premium to the house fair value estimate of $161.18, which corresponds to an implied return of -5.59%. While Avery Dennison represents an exceptionally well-run compounder, the valuation fully reflects intermediate earnings power and leaves an insufficient margin of safety against 2H destocking volatility, supporting the committee's Hold recommendation.3
Materials Group generated $6.09B in FY2025 net sales with adjusted operating margins of 15.8%. Avery Dennison's unmatched procurement scale and formula-based pricing mechanisms enable rapid pass-through of resin and pulp input inflation.8
Intelligent Labels ($0.9B revenue) provides secular growth as tier-1 enterprise retailers expand RFID mandates beyond apparel into grocery, perishable food, and logistics.
Avery Dennison generated $469.8M in adjusted FCF in 1H 2026 (126% of net income) and returned $347M to shareholders. A disciplined ~100% target FCF conversion funds continuous share repurchases and an attractive $4.00 annual dividend.
Hold. Avery Dennison is a high-quality compounder with durable economic moats, but shares trade at a 5.92% premium to intrinsic fair value of $161.18 while navigating a guided $0.25 Q3 destocking headwind, warranting patience until valuation offers a greater margin of safety.5
Avery Dennison Corporation (NYSE: AVY) is a global materials science and digital identification solutions company headquartered in Mentor, Ohio. The company operates through two major reporting segments: Materials Group, which accounted for $6.09B in net sales in FY2025, and Solutions Group, which generated $2.76B in FY2025, delivering total net sales of $8.86B. Materials Group manufactures pressure-sensitive roll materials, graphics and reflective films, and performance tapes, serving consumer packaged goods, industrial, and durables end markets. Solutions Group develops branding and digital identification solutions, including radio-frequency identification (RFID) inlays and software (Intelligent Labels), pricing tags, and architectural graphics for apparel, general retail, food/grocery, and logistics.
Avery Dennison maintains an expansive global operational presence, generating $2.75B in FY2025 revenue from the United States, $2.46B from Europe, the Middle East, and North Africa, $2.73B from Asia (including $1.35B from China and Hong Kong), and $567.3M from Latin America. The company's customer base is highly diversified: no single customer accounts for 10% or more of net sales, with the top ten customers collectively representing approximately 17% in FY2025.
Under a compounded stress scenario where converter destocking intensifies through 2H 2026 and 1H 2027, petrochemical input costs increase without immediate price offset, and Solutions Group RFID adoption stagnates, Avery Dennison faces significant operational deleverage. With ~2.5% of 1H 2026 organic growth attributed to customer inventory building, the guided $0.25 sequential EPS headwind in Q3 could widen into a multi-quarter overhang. If consolidated operating margin drops toward 9.5% and cost of capital rises to 9.63%, free cash flow generation would compress from the FY2025 level of $712.4M, driving substantial valuation downside relative to the house Fair value midpoint of $161.18.
Customer inventory destocking in Materials Group persists through 2027 while resin and paper cost inflation outpaces price increases. Slower enterprise RFID adoption across retail and logistics depresses top-line volume growth and compresses operating margins toward cyclical lows.
Operating margins in Materials Group face severe pressure when petrochemical resins and specialty paper substrates experience rapid price spikes while downstream converters push back against formula price increases. Operating margin previously dropped to 4.60% in FY2019 and 9.73% in FY2023. Mid-single-digit raw material cost increases in 2026 demonstrate continued exposure. A breach below 9.5% consolidated margin reduces intrinsic value by 24.5%.5
التطورات الخمسة التي قد تضعف أطروحتنا الاستثمارية.
A decline in consolidated operating margin below 9.5% would indicate that persistent resin and pulp inflation cannot be offset through pricing, directly breaking the Materials Group pricing power thesis.
الحالي:13.6% adjusted operating margin in Q2 2026 (Materials Group at 15.8%)
تنبيه إذا
Avery Dennison Corporation's competitive advantage is anchored in its dual franchise structure: global market leadership in pressure-sensitive materials and pioneering technology leadership in digital identification solutions. In the Materials Group, which generated $6.09B of the company's $8.86B net sales in FY2025, the company leverages extensive coating, polymer, and adhesive formulation capabilities alongside a worldwide network of slitting and distribution facilities. This scale provides structural procurement advantages over petrochemical resin and specialty paper suppliers, while offering converters just-in-time delivery of customized roll materials across the United States ($2.75B in FY2025 sales), Europe/MENA ($2.46B), and Asia ($2.73B).
In the Solutions Group, generating $2.76B in FY2025 net sales, Avery Dennison has built a differentiated position in Intelligent Labels, representing $0.9B in high-value RFID products. The business integrates antenna design, chip attachment, inlay manufacturing, and data management software into retailer operations. As major retail enterprises expand RFID mandates from apparel into grocery, perishable food, and logistics, Avery Dennison's intellectual property and established delivery scale create significant barriers to entry for potential challengers.
The durability of these advantages is evidenced by economic profit generation well above capital costs. With computed WACC at 7.6325% and FY2025 ROE at 31.16%, Avery Dennison continues to expand adjusted operating margins, which improved 70 bps YoY to 13.6% in Q2 2026. While periodic cyclical destocking and raw material swings cause margin volatility (operating margin was 4.60% in FY2019 and 9.73% in FY2023), the company's pricing discipline and raw material cost-out reengineering consistently restore segment profitability.
Avery Dennison earns economic returns comfortably in excess of its cost of capital. FY2025 return on equity was 31.16%, while the company's computed WACC is 7.6325% with a cost of equity of 8.5618%. In Q2 2026, adjusted operating margin expanded 70 bps YoY to 13.6% and adjusted EBITDA margin reached 17.1%, reflecting sustained value creation above the hurdle rate.2
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
None of the valuation methods used to calculate Fair value relies on a separate assumption about how long the competitive advantage lasts.
The highlighted cell is Fair value when every assumption sits at its base level ($161.18). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $696.3M after modeled reinvestment of $152.8M, with terminal value at 80.8% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to revenue, reinvestment, or gross margin resets materially.
Avery Dennison absorbs the guided Q3 destocking headwind of ~$0.25 per share, achieving full-year 2026 adjusted EPS within guidance of $10.00 to $10.30. Restructuring actions deliver >$60M in savings and Intelligent Labels expands moderately, anchoring intrinsic fair value at $161.18.5
Demonstrates that customer inventory normalization concluded faster than expected, operating margins expanded despite raw material inflation, and RFID commercial rollouts in grocery and logistics are accelerating ahead of consensus.
Confirms management's baseline destocking cadence and steady productivity execution, preserving fair value compound without immediate multiple re-rating.
Signals that converter destocking is compounding into broader demand contraction, price realization is lagging raw material inflation, or RFID pilots are facing enterprise budget deferrals.
Avery Dennison demonstrates high earnings quality supported by disciplined cash conversion. In Q2 2026, reported GAAP EPS was $2.67 and adjusted EPS was $2.89, with the $0.22 per share differential ($21.0M pretax) cleanly accounted for by restructuring severance ($16.2M), asset impairments ($2.4M), and venture losses ($1.2M). In 1H 2026, operating cash flow reached $544.7M against net income of $372.2M, generating adjusted free cash flow of $469.8M for an exceptional cash conversion rate of 126% of net income. FY2025 free cash flow was similarly robust at $712.4M on operating cash flow of $881.4M and net income of $688.0M.67
Consensus estimate momentum has been positive following strong Q2 2026 results. Full-year FY2026 consensus EPS increased from $10.02 pre-event to $10.18 post-event, currently standing at $10.19. FY2026 revenue consensus advanced from $9.26B to $9.34B. For FY2027, consensus EPS rose from $11.15 to $11.19 on revenue of $9.63B.1
Approximately half of 1H 2026 organic sales growth (~2.5% of 5% total) was customer inventory building; verifying the speed and cleanliness of the Q3 reversal is critical to confirming baseline demand.5
Free cash flow generation is an outstanding pillar of Avery Dennison's investment profile. Operating cash flow in 1H 2026 surged to $544.7M from $192.5M in the prior-year period, driven by working capital normalization and higher operating profitability. Adjusted free cash flow for 1H 2026 reached $469.8M compared to $135.8M in 1H 2025, representing a cash conversion of 126% of reported net income ($372.2M). Management targets ~100% full-year adjusted free cash flow conversion. In FY2025, operating cash flow was $881.4M and free cash flow was $712.4M after deducting $169.0M in capital expenditures. The house forecast models steady free cash flow to firm expanding from $696.3M in FY2026 to $822.0M in FY2030.67
Avery Dennison exhibits a stable to improving ROIC trajectory as productivity initiatives and secular RFID growth expand margins. Adjusted operating margin improved 70 bps YoY to 13.6% in Q2 2026, while adjusted EBITDA margin expanded 50 bps to 17.1%. Historical operating margins fluctuated from 4.60% in FY2019 and 9.73% in FY2023 to 11.98% in FY2025, and house projections model operating margin steadily expanding from 12.2% in FY2026 to 12.6% by FY2030.
Avery Dennison's return on capital substantially exceeds its hurdle rate. Computed WACC is 7.6325% with a cost of equity of 8.5618% based on an adjusted beta of 0.7909. FY2025 ROE was 31.16%, delivering robust economic profit spreads across operating cycles.
| الإيرادات | 8,855,500,000 US$ |
|---|---|
| تكلفة الإيرادات | 6,309,200,000 US$ |
| إجمالي الربح | 2,546,300,000 US$ |
| المصروفات التشغيلية | 1,442,400,000 US$ |
| الدخل التشغيلي | 1,103,900,000 US$ |
| البنود غير التشغيلية والضرائب | -415,900,000 US$ |
| صافي الدخل | 688,000,000 US$ |
| إجمالي الأصول | 8,801,700,000 US$ |
|---|---|
| النقد | 202,800,000 US$ |
| الأصول المتداولة | 2,990,300,000 US$ |
| إجمالي الالتزامات | 6,559,600,000 US$ |
| الالتزامات المتداولة | 2,653,600,000 US$ |
| حقوق المساهمين | 2,242,100,000 US$ |
| صافي الدخل | 688,000,000 US$ |
|---|---|
| التدفق النقدي التشغيلي الداخل | 1,044,100,000 US$ |
| الإهلاك والإطفاء | 328,200,000 US$ |
| التعويض القائم على الأسهم | 27,900,000 US$ |
| التدفق النقدي التشغيلي | 881,400,000 US$ |
| التدفق النقدي التشغيلي الخارج | 162,700,000 US$ |
| النقد المتاح | 1,213,700,000 US$ |
| النقد في بداية الفترة | 329,100,000 US$ |
| تأثير سعر الصرف | 3,200,000 US$ |
| التدفق الاستثماري الخارج | 596,000,000 US$ |
| النفقات الرأسمالية | 169,000,000 US$ |
| أنشطة استثمارية أخرى | 427,000,000 US$ |
| التدفق التمويلي الخارج | 414,900,000 US$ |
| صافي إصدار الدين | 439,600,000 US$ |
| إعادة شراء الأسهم | 572,300,000 US$ |
| أرباح الأسهم المدفوعة | 288,400,000 US$ |
| النقد في نهاية الفترة | 202,800,000 US$ |
| التدفق النقدي الاستثماري | -596,000,000 US$ |
| التدفق النقدي التمويلي | -414,900,000 US$ |
المصدر: SEC EDGAR · تاريخ الإيداع 2026-02-25 · SEC EDGAR
| الإيرادات حسب القطاع التشغيلي | الإيرادات | الحصة | على أساس سنوي |
|---|---|---|---|
| Materials Group | 6.1 مليار US$ | 68.8% | 1.3% |
| Solutions Group | 2.8 مليار US$ | 31.2% | 0.7% |
البيانات المالية في نقطة زمنية المستخدمة في تحليل 2026-10-14.
| الفترة | الإيرادات | EBITDA | صافي الدخل | التدفق النقدي التشغيلي | التدفق النقدي الحر | النفقات الرأسمالية | الإهلاك والإطفاء | التعويض القائم على الأسهم | إعادة شراء الأسهم | أرباح الأسهم المدفوعة | صافي إصدار الدين | التدفق النقدي الاستثماري | التدفق النقدي التمويلي | النقد في بداية الفترة | النقد في نهاية الفترة | النقد والاستثمارات | إجمالي الديون | الهامش التشغيلي | ROIC | WACC | فارق ROIC−WACC |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016-12-31 | 6.1 مليار US$ | 717 مليون US$ | 320.7 مليون US$ | 582.1 مليون US$ | 405.2 مليون US$ | 176.9 مليون US$ | 180.1 مليون US$ | 27.2 مليون US$ | 262.4 مليون US$ | 142.5 مليون US$ | — | -432.2 مليون US$ | -106.2 مليون US$ | — | 195.1 مليون US$ | 212.7 مليون US$ | 1.3 مليار US$ | 9.8% | — | 5.6% | — |
| 2017-12-30 | 6.6 مليار US$ | 829.4 مليون US$ | 281.8 مليون US$ | 645.7 مليون US$ | 455.2 مليون US$ | 190.5 مليون US$ | 178.7 مليون US$ | 30.2 مليون US$ | 129.7 مليون US$ | 155.5 مليون US$ | — | -543.3 مليون US$ | -83.9 مليون US$ | 195.1 مليون US$ | 224.4 مليون US$ | 246.7 مليون US$ | 1.6 مليار US$ | 11.4% | — | 5.9% | — |
| 2018-12-29 | 7.2 مليار US$ | 794.3 مليون US$ | 467.4 مليون US$ | 457.9 مليون US$ | 231.2 مليون US$ | 226.7 مليون US$ | 181 مليون US$ | 34.3 مليون US$ | 392.9 مليون US$ | 175 مليون US$ | — | -232.5 مليون US$ | -208.1 مليون US$ | 224.4 مليون US$ | 232 مليون US$ | 258.1 مليون US$ | 1.8 مليار US$ | 11.3% | — | 6.4% | — |
| 2019-12-28 | 7.1 مليار US$ | 504.3 مليون US$ | 303.6 مليون US$ | 746.5 مليون US$ | 527.1 مليون US$ | 219.4 مليون US$ | 179 مليون US$ | 34.5 مليون US$ | 237.7 مليون US$ | 189.7 مليون US$ | — | -251 مليون US$ | -470.3 مليون US$ | 232 مليون US$ | 253.7 مليون US$ | 284.3 مليون US$ | 1.5 مليار US$ | 11.6% | — | 6.6% | — |
| 2021-01-02 | 7 مليار US$ | 1 مليار US$ | 555.9 مليون US$ | 751.3 مليون US$ | 549.9 مليون US$ | 201.4 مليون US$ | 205.3 مليون US$ | 24 مليون US$ | 104.3 مليون US$ | 196.8 مليون US$ | — | -554.2 مليون US$ | -207.7 مليون US$ | 253.7 مليون US$ | 252.3 مليون US$ | 284.9 مليون US$ | 2 مليار US$ | 12.6% | — | 4.8% | — |
| 2022-01-01 | 8.4 مليار US$ | 1.3 مليار US$ | 740.1 مليون US$ | 1 مليار US$ | 791.8 مليون US$ | 255 مليون US$ | 244.1 مليون US$ | 37.2 مليون US$ | 180.9 مليون US$ | 220.6 مليون US$ | — | -1.7 مليار US$ | 604.3 مليون US$ | 252.3 مليون US$ | 162.7 مليون US$ | 196.1 مليون US$ | 2.8 مليار US$ | 12.4% | — | 5.3% | — |
| 2022-12-31 | 9 مليار US$ | 1.4 مليار US$ | 757.1 مليون US$ | 961 مليون US$ | 682.9 مليون US$ | 278.1 مليون US$ | 290.7 مليون US$ | 47.4 مليون US$ | 379.5 مليون US$ | 238.9 مليون US$ | 28.3 مليون US$ | -332.7 مليون US$ | -615.2 مليون US$ | 162.7 مليون US$ | 167.2 مليون US$ | 198.5 مليون US$ | 2.5 مليار US$ | 11.9% | — | 7.7% | — |
| 2023-12-30 | 8.4 مليار US$ | 1.1 مليار US$ | 503 مليون US$ | 826 مليون US$ | 560.7 مليون US$ | 265.3 مليون US$ | 298.4 مليون US$ | 22.3 مليون US$ | 137.5 مليون US$ | 256.7 مليون US$ | 102.4 مليون US$ | -459 مليون US$ | -317.2 مليون US$ | 167.2 مليون US$ | 215 مليون US$ | 250.1 مليون US$ | 2.6 مليار US$ | 11.4% | — | 7.5% | — |
| 2024-12-28 | 8.8 مليار US$ | 1.4 مليار US$ | 704.9 مليون US$ | 938.8 مليون US$ | 730 مليون US$ | 208.8 مليون US$ | 312.2 مليون US$ | 28.7 مليون US$ | 247.5 مليون US$ | 277.5 مليون US$ | -37.9 مليون US$ | -243.1 مليون US$ | -576.1 مليون US$ | 215 مليون US$ | 329.1 مليون US$ | 368.7 مليون US$ | 2.6 مليار US$ | 12.9% | — | 7.8% | — |
| 2025-12-31 | 8.9 مليار US$ | 1.4 مليار US$ | 688 مليون US$ | 881.4 مليون US$ | 712.4 مليون US$ | 169 مليون US$ | 328.2 مليون US$ | 27.9 مليون US$ | 572.3 مليون US$ | 288.4 مليون US$ | 439.6 مليون US$ | -596 مليون US$ | -414.9 مليون US$ | 329.1 مليون US$ | 202.8 مليون US$ | 250.8 مليون US$ | 3.2 مليار US$ | 12.5% | — | 6.8% | — |
Avery Dennison Corporation (AVY) trades at 15.3x forward earnings against a peer median of 15.3x. Its EV/EBITDA of 10.9x compares with a peer median of 12.1x. The comparison uses 4 peers: Packaging Corporation of America, Ball Corporation, Domino's Pizza Inc. and Tractor Supply Company, as of 2026-10-13.
Avery Dennison operates in a mature packaging and materials converting capital cycle. Full-year 2026 CapEx is guided at ~$260M, up from $169.0M in FY2025 and representing approximately 2.8% of guided revenue. Net reinvestment rate is modeled at a steady 18.0% of NOPAT. Independent industry capex-to-depreciation benchmarks are unavailable; our capital cycle view is demand-led and evidence-limited regarding broader converter industry capacity additions.57
In a cyclical upswing, broad consumer retail spending rebounds, driving restocking across label converters and brand owners. Materials Group operates at high capacity utilization with strong pricing power, while Solutions Group benefits from accelerated enterprise rollouts of Intelligent Labels in food, apparel, and parcel logistics, expanding operating margins above 13%.
In a cyclical downturn, consumer packaged goods demand weakens, leading converters to aggressively draw down inventories and resist price increases. Petrochemical resin and paper substrate costs squeeze margins, while retail enterprises defer discretionary RFID software and tagging investments, compressing Materials Group margins below 10%.
Avery Dennison occupies an advantageous positioning across the converting value chain. As the largest merchant supplier of pressure-sensitive roll materials ($6.09B FY2025 sales), it acts as an essential supply-chain partner rather than a competitor to regional converters. In digital identification, its scale in RFID inlays ($0.9B Intelligent Labels) allows it to capture disproportionate value from retail automation without taking direct apparel inventory risk.8
A Hold rating reflects balanced risk-reward at the October 13, 2026 share price. Existing positions should be maintained at a neutral portfolio weighting (typically 2-3% of a diversified dividend growth portfolio), with incremental capital paused until a valuation discount emerges or Q3 destocking headwinds resolve.
Risk management centers on monitoring credit leverage, input price volatility, and currency exposure. With net debt to adjusted EBITDA at 2.3x and total debt at $3.69B, capital allocation should prioritize debt retirement over large-scale speculative M&A. Extensive international operations ($2.73B Asia, $2.46B Europe/MENA) require monitoring foreign exchange shifts, while strong FCF conversion protects the $4.00 dividend payout.
Attractive $4.00 annual dividend yielding 2.34% is well covered by robust free cash flow ($469.8M 1H adjusted FCF) and conservative 2.3x leverage, but valuation upside is limited near current prices.
At $170.72, AVY trades at 15.29x forward P/E and a 5.92% premium to fair value mid of $161.18, providing an insufficient margin of safety to justify aggressive new buying.3
Customer inventory stocking artificially elevated 1H 2026 organic growth by ~2.5%, setting up an estimated $0.25 Q3 headwind amid sticky input costs and $3.69B in debt.25
Maintain Hold rating on Avery Dennison Corporation (AVY) with a fair value estimate of $161.18. At the October 13, 2026 share price of $170.72, shares trade at a 5.92% premium to intrinsic fair value (-5.59% implied return), offering a balanced risk-reward profile that warrants patience.3
While secular adoption of Intelligent Labels RFID and strong pricing power in Materials Group support Avery Dennison's compounder status, near-term customer destocking (guided at ~$0.25 per share sequential EPS headwind in Q3) and full valuation limit intermediate capital appreciation potential.
دوّن أطروحتك الاستثمارية وحجم مركزك وأسئلة المتابعة. تبقى على هذا الجهاز، ولا يراها أحد سواك.
The records this analysis drew on, as they stood when it was run.
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
Customer inventory accumulation provided ~2.5% of organic growth in 1H 2026 (~5% total), with a $0.25 per share benefit in Q2 reversing into a guided $0.25 headwind in Q3. Corporate guidance anticipates full-year growth of only 3% to 4%. If destocking extends through 2027 and Solutions Group RFID enterprise adoption elongates, 5-year revenue CAGR collapsing below 1.5% drives an estimated 21.8% fair value reduction.5
Total debt reached $3,685.2M as of October 2026, while financial leverage ratio deteriorated to 0.3647. Net debt to adjusted EBITDA stands at 2.3x. A 200 bps widening of computed WACC over 7.6325% to 9.63% due to higher refinancing yields and packaging credit spreads drives an estimated 26.0% fair value contraction.2
Packaging peer Ball Corp trades at 13.17x forward P/E and cyclicals like Domino's trade at 14.19x. If EPS CAGR slips to the bear path of 4.5%, terminal P/E contracts below 12.0x from the current 15.0x assumption, delivering a 15.5% fair value impairment.4
Deceleration of top-line revenue growth below 1.5% confirms that 1H 2026 volume was artificially inflated by customer inventory stocking rather than organic end-market demand, threatening multi-year compound growth.
الحالي:3% to 4% organic sales growth full-year 2026 guidance
تنبيه إذا< 1.5% YoY revenue growth
Failure of food and logistics pilots to convert to full commercial rollouts indicates enterprise adoption fatigue and share loss, undermining high-margin secular growth assumptions.
الحالي:Food and logistics RFID down double digits in Q2 2026
تنبيه إذاNegative organic growth in Solutions Group extending past Q4 2026
Refinancing debt maturities at elevated credit spreads increases interest expense above the $71.5M 1H 2026 pace and compresses enterprise valuation.
الحالي:Computed WACC of 7.63% with total debt of $3.69B
تنبيه إذا> 9.63% WACC (> 200 bps widening)
A breakdown in cash conversion below 80% would indicate inventory accumulation from unsold converter goods and extended customer receivables, impairing capital returns.
الحالي:126% of net income in 1H 2026 ($469.8M adjusted FCF on $372.2M net income)
تنبيه إذا< 80% adjusted FCF conversion of net income
| Execution of the restructuring playbook to deliver >$60M in structural savings in 2026, combined with global inventory management. |
| Lapping outsized market share and volume in parcel logistics RFID. | low | 12 to 24 months | Expanding commercial rollouts in perishable food and protein with Kroger and Walmart. |
Under the moderate discount rate, 39.72 US$ comes from forecast-period earnings and 164 US$ from the long-term value, totaling 204 US$.
Apply a terminal P/E to the dated forward EPS path, then discount that future share value back to the analysis date.
Convert the revenue and margin path into after-tax free cash flow, discount the annual per-share amounts and terminal value at WACC, then adjust for signed net debt per current share.
Discounted forecast-period cash flows (39.79 US$) plus discounted terminal value (167 US$) minus signed per current share (38.54 US$) equals the 169 US$ lens value shown above. Negative net debt is , so subtracting it raises value.
Add depreciation to net income, subtract maintenance capex, divide by diluted shares, and apply a normalized valuation multiple.
Discount the explicit dividend path and its Gordon-growth terminal value at cost of equity.
Solve for the growth rate that makes the model value equal the report-date share price.
Multiply the peer median PEG by this stock's forecast growth to derive an implied forward P/E, then apply it to forward EPS.
Customer inventory destocking resolves rapidly in Q3 2026, while Solutions Group Intelligent Labels adoption in grocery and food logistics accelerates ahead of schedule. Materials Group sustains pricing power against input inflation, driving margin expansion and full-year earnings toward the top of guidance, supporting intrinsic valuation toward the upper fair value band of $204.24.
Intelligent Labels represents the primary multi-year secular growth vector; adoption in grocery and food logistics must offset apparel maturity.
Low-single-digit sequential inflation in resin and paper substrates during 2H 2026 requires continuous formula pricing realization to sustain Materials Group adjusted operating margins above 15%.5
Incremental structural cost reductions are essential to offset wage inflation and normalizing employee incentive compensation in 2026.5
Management targets ~100% adjusted FCF conversion with $260M CapEx, supporting the $4.00 annual dividend and ongoing share count reduction.5
| $10.02B |
| $10.37B |
| $10.68B |
| Revenue growth | 5.5% | 3.1% | 4.0% | 3.5% | 3.0% |
| Operating margin | 12.2% | 12.4% | 12.5% | 12.6% | 12.6% |
| Operating income | $1.14B | $1.19B | $1.25B | $1.31B | $1.35B |
| Tax rate | 25.5% | 25.5% | 25.5% | 25.5% | 25.5% |
| NOPAT | $849.14M | $889.82M | $932.88M | $973.25M | $1.00B |
| Reinvestment | $152.85M | $160.17M | $167.92M | $175.19M | $180.44M |
| Reinvestment rate (of NOPAT) | 18.0% | 18.0% | 18.0% | 18.0% | 18.0% |
| Free cash flow to firm | $696.30M | $729.65M | $764.96M | $798.07M | $822.01M |
| Materials Group revenue | $6.43B | $6.63B | $6.89B | $7.13B | $7.35B |
| Solutions Group revenue | $2.91B | $3.00B | $3.12B | $3.23B | $3.33B |
| Terminal growth | 2.5% | 2.5% | 2.5% | 2.5% | 2.5% |
Avery Dennison follows a disciplined capital allocation framework focused on high return on invested capital. In 1H 2026, the company generated $544.7M in operating cash flow and deployed $81.4M into property, plant, equipment, and software. Capital expenditure is guided at approximately $260M for full-year 2026, compared to $169.0M in FY2025. Over the first six months of 2026, cash returned to shareholders totaled $346.7M, comprising $198.2M for the repurchase of 1.2M shares and $148.5M in dividend payments. The annual dividend baseline is modeled at $4.00 per share, yielding 2.34%. Balance sheet leverage remains conservative, with total debt of $3.69B and a net debt to adjusted EBITDA ratio of 2.3x, providing financial flexibility for bolt-on acquisitions ($75.5M paid in 1H 2026).
Materials Group adjusted EBITDA grew 17% in Q2 2026 with margins expanding 20 bps to 18.0%, as pricing and raw material re-engineering overcame mid-single-digit cost inflation.
Avery Dennison possesses structural pricing power that insulates gross margins against resin and pulp price shocks.
1H 2026 adjusted free cash flow reached $469.8M, representing 126% of GAAP net income ($372.2M).
High free cash flow conversion supports consistent share repurchases ($198M in 1H 2026) and dividend growth without increasing debt.
Net debt to adjusted EBITDA stands at 2.3x with total debt of $3.69B.
While leverage is manageable, elevated total debt leaves the company sensitive to credit spread widening and higher refinancing yields.
| الهامش |
|---|
| AVY | Avery Dennison Corporation | $13.1B | 15.3x | 1.4x | 10.9x | 31.2% | — |
| PKG | Packaging Corporation of America | $20.6B | 17.1x | 2.2x | 12.0x | 14.9% | 13.1% |
| BALL | Ball Corporation | $15.9B | 13.2x | 1.1x | 11.0x | 17.2% | 9.2% |
| DPZ | Domino's Pizza Inc. | $9.8B | 14.2x | 1.9x | 14.9x | — | 19.1% |
| TSCO | Tractor Supply Company | $17.6B | 16.5x | 1.1x | 12.3x | 39.5% | 12.1% |
| CPG Inventory Bullwhip Cycles and Supply Chain Re-balancing | neutral | Shifting macroeconomic conditions and high interest rates induce periodic inventory bullwhip effects among converters and CPG brand owners, causing short-term volume distortions. |
| > $0.35 sequential EPS headwind (vs guided ~$0.25) |
| Trim position sizing and lower full-year EPS expectations below guidance midpoint. |
| Solutions Group Organic Sales Growth | < 1.0% YoY for two consecutive quarters | Re-examine RFID adoption timeline in non-apparel end markets and audit competitive market share. |
