Avery Dennison (AVY): At the Crossroads of RFID Scale—Can Intelligent Labels Deliver Sustained Multiyear Growth?

$50.00 — or $120.00 / year

Avery Dennison’s Q3 FY2024 results reflect mixed performance amid macroeconomic pressures, with adjusted EPS of $2.33 and revenue of $2.18B, both narrowly missing expectations. The Materials Group, contributing 70% of revenue, remains a resilient cash generator, stabilizing above 2019 levels despite European weakness, with pricing discipline and productivity gains sustaining margins. The Solutions Group, particularly the Intelligent Labels (IL) platform, is the company’s growth engine, with a 15%+ CAGR driven by RFID adoption in verticals like logistics, food, and quick-service restaurants, validated by partnerships with Kroger and Chipotle. However, execution challenges in new markets, inventory destocking, and uneven adoption temper near-term growth. Management’s guidance of 5%+ core sales growth and 10%+ EPS CAGR hinges on accelerating IL adoption and sustaining Materials margins amid inflation normalization. With a strong balance sheet, Avery balances shareholder returns through dividends and buybacks with accretive M&A. Trading at 18.3x NTM P/E, valuation appears pressured given slower execution. Long-term structural drivers remain intact, but near-term catalysts, including RFID adoption in logistics and food and macro stabilization in Europe and China, are critical. The strategic question is: can Avery Dennison overcome volatility and uneven growth dynamics to fully capitalize on Intelligent Labels’ multiyear growth potential?

Table of Contents :
• Stock Rating & Target Price
• Investment Thesis
• Fundamental Models Used
• Company Description
• Corporate Timeline
• Key Metrics (KPI ) and Recently Reported Earnings Review
• Business Highlights, Strategic Announcements & Outlook
• Quarter-over-Quarter (Q-o-Q) and Year-over-Year (Y-o-Y) Growth Analysis
• Key Catalysts Driving Growth
• Historical Financial Statement Analysis & CAGR Trends
• Quarterly Key Financial Ratios and Performance Metrics
• Annual Financial Performance Analysis: Horizontal and Vertical Financial Analysis, Trends
• Financial Forecasts
• Annual Forecasts: Income Statement
• Annual Forecasts: Cash Flow Statements
• Net Debt Levels
• A Closer Look at DCF: Our Assumptions and Methodology
• Terminal Value Calculation
• Target Price Analysis
• Valuation Multiples
• Supplementary Valuation Analysis: Multiples Approach
• Scenario/Sensitivity Analysis – Base Case , Bull Case ,Bear Case
• Holistic Peer Review & Trading Comps: Financial Data, Operational Metrics, and Valuation Multiples
• Implied Price Per Share
• Ownership Activity/ Insider Trades
• Ownership Summary
• An analysis of ESG Risk Rating
• Key Professionals
• Key Board Members
• Key Risks Considerations
• Analyst Ratings
• Analyst Industry Views
• Disclosures

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