Avery Dennison (NYSE:AVY) Announces Earnings Results

Key Points

• Q3 results beat expectations: Avery Dennison reported adjusted EPS of $2.42 versus the $2.32 consensus estimate, while revenue rose 5.2% year over year to $2.33 billion.
• Outlook and shareholder returns improved: Management raised the midpoint of its full-year adjusted EPS forecast to $10.10–$10.24, expects more than 100% free-cash-flow conversion, and continues returning capital through dividends and buybacks.
• Risks remain: Customer inventory destocking, especially in European materials markets, and cost pressures weighed on margins, while logistics-related Intelligent Labels demand declined and a major RFID rollout was delayed to 2027.

Avery Dennison (NYSE:AVY - Get Free Report) released its earnings results on Thursday. The industrial products company reported $2.42 EPS for the quarter, topping the consensus estimate of $2.32 by $0.10, FiscalAI reports. Avery Dennison had a net margin of 7.62% and a return on equity of 34.60%. The company had revenue of $2.33 billion during the quarter, compared to analysts' expectations of $2.26 billion. During the same quarter last year, the business earned $2.37 EPS. The business's revenue was up 5.2% on a year-over-year basis.

Here are the key takeaways from Avery Dennison's conference call:

• Positive Sentiment: Avery Dennison reported solid third-quarter execution, with organic sales up 4%, adjusted EPS of $2.42 (up 2%), and $246 million of adjusted free cash flow. Excluding an estimated destocking impact, management characterized underlying organic sales growth at approximately 6% and EPS growth at approximately 8%.
• Positive Sentiment: The company slightly raised the midpoint of its full-year adjusted EPS outlook to $10.10–$10.24, representing roughly 7% year-over-year growth, and now expects more than 100% free-cash-flow conversion. Restructuring savings are expected to exceed $65 million, while the company continues returning capital through dividends and share repurchases.
• Negative Sentiment: Customer inventory destocking remains a headwind, particularly in European materials markets, and management expects most remaining pre-buy inventory to unwind by the end of the fourth quarter. Materials Group margins declined roughly one point year over year as price pass-through, wage inflation, and incentive compensation costs outweighed productivity gains.
• Neutral Sentiment: Intelligent Labels growth was mixed: apparel and general retail rose about 10% and food adoption continued to build, but logistics sales fell by double digits due to share normalization and softer demand. The rollout of a major retailer’s fresh-food RFID program has shifted into 2027, although management remains confident in double-digit longer-term Intelligent Labels growth.
• Positive Sentiment: Solutions Group profitability improved meaningfully, with adjusted EBITDA margins expanding 80 basis points to 17.8%, supported by strong productivity and restructuring efforts. Management also cited continued share gains in Materials and secular demand tied to sustainability regulations and higher-value filmic products.

Avery Dennison Price Performance

AVY stock traded up $1.52 during trading on Thursday, hitting $182.22. The stock had a trading volume of 738,620 shares, compared to its average volume of 740,080. The stock has a market cap of $13.81 billion, a price-to-earnings ratio of 19.93, a price-to-earnings-growth ratio of 2.19 and a beta of 0.79. The company has a debt-to-equity ratio of 1.37, a quick ratio of 0.79 and a current ratio of 1.13. The company's 50 day moving average price is $174.27 and its two-hundred day moving average price is $172.34. Avery Dennison has a 1-year low of $152.42 and a 1-year high of $199.54.

Avery Dennison Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Wednesday, December 16th. Investors of record on Wednesday, December 2nd will be given a dividend of $1.00 per share. This represents a $4.00 dividend on an annualized basis and a yield of 2.2%. The ex-dividend date is Wednesday, December 2nd. Avery Dennison's dividend payout ratio (DPR) is currently 43.81%.

Insider Activity

In other news, SVP Ignacio J. Walker sold 1,742 shares of the stock in a transaction dated Tuesday, August 4th. The shares were sold at an average price of $171.61, for a total transaction of $298,944.62. Following the transaction, the senior vice president directly owned 7,585 shares in the company, valued at $1,301,661.85. This represents a 18.68% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, SVP Nicholas Colisto sold 3,886 shares of Avery Dennison stock in a transaction on Tuesday, September 15th. The shares were sold at an average price of $170.68, for a total transaction of $663,262.48. Following the completion of the transaction, the senior vice president owned 7,126 shares in the company, valued at approximately $1,216,265.68. This trade represents a 35.29% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. 0.81% of the stock is owned by company insiders.

Analysts Set New Price Targets

A number of equities research analysts have commented on the company. JPMorgan Chase & Co. raised their target price on Avery Dennison from $185.00 to $190.00 and gave the company an "overweight" rating in a report on Friday, July 31st. Truist Financial lowered their target price on shares of Avery Dennison from $209.00 to $208.00 and set a "buy" rating on the stock in a research report on Monday, October 12th. Citigroup raised their price objective on Avery Dennison from $184.00 to $186.00 and gave the company a "neutral" rating in a research note on Friday, July 31st. Wall Street Zen upgraded Avery Dennison from a "hold" rating to a "buy" rating in a research report on Saturday, August 8th. Finally, Jefferies Financial Group reissued a "hold" rating and issued a $181.00 target price on shares of Avery Dennison in a report on Monday, September 28th. Six investment analysts have rated the stock with a Buy rating and three have issued a Hold rating to the company. According to data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and a consensus target price of $199.10.

Trending Headlines about Avery Dennison

Here are the key news stories impacting Avery Dennison this week:

• Positive Sentiment: Q3 results exceeded expectations: Avery Dennison reported adjusted earnings of $2.42 per share, ahead of the $2.32 consensus estimate, while revenue rose 5.2% year over year to $2.33 billion, surpassing forecasts of approximately $2.26 billion. Avery Dennison Q3 earnings report
• Positive Sentiment: Productivity and pricing supported results: Management’s productivity initiatives and pricing actions helped drive the earnings beat. Materials Group sales increased 8.5%, and the company indicated that customer destocking is easing, potentially supporting demand recovery. Avery Dennison earnings beat estimates
• Positive Sentiment: Shareholder returns remain substantial: Avery Dennison returned $481 million through dividends and share repurchases during the first nine months of 2026. Analysts’ consensus target price of $199.10 also implies potential additional upside from recent trading levels. Avery Dennison consensus target price
• Neutral Sentiment: 2026 guidance was maintained: The company kept its full-year reported EPS outlook at $9.45 to $9.59, providing stability but not a clear upward revision following the quarterly beat. Avery Dennison third-quarter sales and guidance
• Negative Sentiment: Margins and destocking remain risks: Solutions Group sales declined 1.8%, and analysts noted margin pressure and lingering customer inventory reductions in the 2026 outlook. These factors could restrain earnings growth even as revenue improves. Avery Dennison productivity and outlook analysis

About Avery Dennison

Avery Dennison Corporation NYSE: AVY is a global materials science and manufacturing company that develops and produces labeling, packaging, graphic, and functional materials. Its products are used by businesses across industries including consumer goods, retail, logistics, apparel, automotive, healthcare, and industrial manufacturing.

The company's offerings include pressure-sensitive labels and label materials, adhesives, industrial and specialty tapes, graphic films, and packaging materials.

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