📊 AVY Key Takeaways
Is Avery Dennison Corp (AVY) a Good Investment?
Avery Dennison demonstrates solid operational fundamentals with strong profitability metrics (28.8% gross margin, 10.4% operating margin) and excellent returns on equity at 30.7%, supported by robust free cash flow generation of $712.4M. The company maintains healthy interest coverage of 32.3x and generates substantial operating cash flow, though modest revenue growth of 1.1% YoY and declining net income warrant closer monitoring of market headwinds.
Avery Dennison shows solid fundamental quality through healthy margins, strong free cash flow generation, and excellent interest coverage, indicating a durable and profitable operating model. Growth is modest and recent net income softened slightly, but the business still converts revenue into cash efficiently while sustaining strong returns on equity. The main fundamental constraint is balance sheet leverage and only adequate liquidity, which makes execution and cash discipline important.
Why Buy Avery Dennison Corp Stock? AVY Key Strengths
- Exceptional ROE of 30.7% indicates efficient capital deployment and strong shareholder value creation
- Robust free cash flow of $712.4M with 8.0% FCF margin supports dividends and debt reduction
- Strong interest coverage ratio of 32.3x provides substantial debt service cushion
- Solid gross and operating margins above 28% and 10% respectively demonstrate pricing power and cost control
- Operating cash flow of $881.4M exceeds net income, indicating high quality earnings
- Strong profitability profile with 28.8% gross margin, 10.4% operating margin, and 7.8% net margin
- Robust cash generation with $881.4M operating cash flow and $712.4M free cash flow
- High earnings resilience shown by 32.3x interest coverage and 30.7% ROE
AVY Stock Risks: Avery Dennison Corp Investment Risks
- Revenue growth of only 1.1% YoY suggests market maturity or competitive pressures in the converted paper products sector
- Net income declined 2.4% YoY despite stable revenue, indicating margin compression or operational challenges
- Elevated leverage with 1.43x debt-to-equity ratio combined with $3.2B long-term debt limits financial flexibility
- Quick ratio of 0.76x below 1.0x signals potential liquidity constraints in near-term obligations
- Current ratio of 1.13x is relatively thin, providing limited buffer for operational disruptions
- Revenue growth is low at 1.1% YoY, which may limit operating leverage and earnings expansion
- Net income declined 2.4% YoY, suggesting some pressure on bottom-line growth quality
- Leverage is meaningful with 1.43x debt/equity and liquidity is only moderate with a 1.13x current ratio and 0.76x quick ratio
Key Metrics to Watch
- Revenue growth acceleration/deceleration trends - stalled 1.1% growth needs reversal
- Operating margin sustainability - monitor for further compression given net income decline
- Free cash flow conversion and capital allocation priorities between debt reduction and reinvestment
- Debt-to-equity ratio trajectory - assess deleveraging progress toward 1.2x or lower
- Liquidity ratios - improvement needed in current and quick ratios above 1.25x and 0.90x respectively
- Free cash flow margin and operating cash flow conversion
- Debt reduction progress and liquidity ratios
Avery Dennison Corp (AVY) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Avery Dennison Corp presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
AVY Profit Margin, ROE & Profitability Analysis
AVY vs Materials Sector: How Avery Dennison Corp Compares
How Avery Dennison Corp compares to Materials sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Avery Dennison Corp Stock Overvalued? AVY Valuation Analysis 2026
Based on fundamental analysis, Avery Dennison Corp has mixed fundamental signals relative to the Materials sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Avery Dennison Corp Balance Sheet: AVY Debt, Cash & Liquidity
AVY Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Avery Dennison Corp's revenue has shown modest growth of 5% over the 5-year period. The most recent EPS of $6.20 reflects profitable operations.
AVY Revenue Growth, EPS Growth & YoY Performance
AVY Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $2.2B | $166.3M | $2.13 |
| Q2 2025 | $2.2B | $176.8M | $2.18 |
| Q1 2025 | $2.1B | $166.3M | $2.09 |
| Q3 2024 | $2.1B | $138.3M | $1.71 |
| Q2 2024 | $2.1B | $100.4M | $1.24 |
| Q1 2024 | $2.1B | $121.2M | $1.49 |
| Q3 2023 | $2.1B | $138.3M | $1.71 |
| Q2 2023 | $2.1B | $100.4M | $1.24 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Avery Dennison Corp Dividends, Buybacks & Capital Allocation
AVY SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Avery Dennison Corp (CIK: 0000008818)
📋 Recent SEC Filings
❓ Frequently Asked Questions about AVY
What is the AI rating for AVY?
Avery Dennison Corp (AVY) has a Combined AI Rating of BUY from Claude (BUY) and ChatGPT (BUY) with 73% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are AVY's key strengths?
Claude: Exceptional ROE of 30.7% indicates efficient capital deployment and strong shareholder value creation. Robust free cash flow of $712.4M with 8.0% FCF margin supports dividends and debt reduction. ChatGPT: Strong profitability profile with 28.8% gross margin, 10.4% operating margin, and 7.8% net margin. Robust cash generation with $881.4M operating cash flow and $712.4M free cash flow.
What are the risks of investing in AVY?
Claude: Revenue growth of only 1.1% YoY suggests market maturity or competitive pressures in the converted paper products sector. Net income declined 2.4% YoY despite stable revenue, indicating margin compression or operational challenges. ChatGPT: Revenue growth is low at 1.1% YoY, which may limit operating leverage and earnings expansion. Net income declined 2.4% YoY, suggesting some pressure on bottom-line growth quality.
What is AVY's revenue and growth?
Avery Dennison Corp reported revenue of $8.9B.
Does AVY pay dividends?
Avery Dennison Corp pays dividends, with $288.4M distributed to shareholders in the trailing twelve months.
Where can I find AVY SEC filings?
Official SEC filings for Avery Dennison Corp (CIK: 0000008818) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is AVY's EPS?
Avery Dennison Corp has a diluted EPS of $8.79.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is AVY a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Avery Dennison Corp has a BUY rating with 73% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is AVY stock overvalued or undervalued?
Valuation metrics for AVY: ROE of 30.7% (sector avg: 14%), net margin of 7.8% (sector avg: 10%). Higher ROE suggests strong returns relative to peers.
Should I buy AVY stock in 2026?
Our dual AI analysis gives Avery Dennison Corp a combined BUY rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is AVY's free cash flow?
Avery Dennison Corp's operating cash flow is $881.4M, with capital expenditures of $169.0M. FCF margin is 8.0%.
How does AVY compare to other Materials stocks?
Vs Materials sector averages: Net margin 7.8% (avg: 10%), ROE 30.7% (avg: 14%), current ratio 1.13 (avg: 1.6).
Why is AVY's return on equity (ROE) so high?
Avery Dennison Corp has a return on equity of 30.7%, significantly above the Materials sector average of 14%. A high ROE indicates the company is efficient at generating profits from shareholder equity. This is supported by a 7.8% net margin.